What to Expect When Disney Reports Earnings

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Walt Disney Co. (NYSE: DIS) is set to release its fiscal second-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are $1.41 in earnings per share (EPS) and $13.45 billion in revenue. The same period of last year reportedly had EPS of $1.36 and $12.97 billion in revenue.

During this quarter, Disney made a huge profit off the “Beauty and the Beast” movie, which cost $160 million to produce, with a worldwide gross of nearly $1.2 billion, which is the highest grossing film in 2017 thus far. Disney released an earlier, animated version of the film in 1991.

It was also announced back in March that Chairman and CEO Robert Iger’s contract has been extended from a previous expiration date of June 30, 2018, to a new expiration date of July 2, 2019. Iger has been Disney’s CEO for 11 years.

Iger presents a pretty strong case, both for his contract extension and his total compensation. In the period between 2005 and 2016, Disney’s total return to shareholders has increased by 350%, more than double the S&P 500’s 123% increase over the same period and nearly double the market-cap weighted return of Disney and six peers.

The two big deals Iger steered to completion were the acquisitions of Lucasfilm and Marvel. The Marvel Cinematic Universe franchise has generated more than $4.2 billion in gross receipts (not all were produced by Disney) from 14 movies, with another 10 due from Disney by 2020.

Ahead of the earnings report, a few analysts weighed in on Disney:

  • Rosenblatt Securities has a Neutral rating with a $125 price target.
  • Goldman Sachs reiterated a Conviction Buy rating with a $138 price target.
  • Needham reiterated a Hold rating.
  • Loop Capital has a Hold rating.
  • Pivotal Research reiterated a Sell rating with an $85 price target.
  • Morgan Stanley has an Overweight rating with a $130 price target.
  • Guggenheim has a Buy rating with a $128 price target.
  • JPMorgan reiterated an Overweight rating with a $124 price target.

So far in 2017 the Mouse House has traded more or less in line with the broad markets, with the stock up about 7% in this time.

Shares of Disney were trading at $111.40 on Tuesday, with a consensus analyst price target of $119.11 and a 52-week trading range of $90.32 to $116.10.