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What to Expect From Disney Earnings

Walt Disney Co. (NYSE: DIS) is scheduled to report its fiscal second-quarter financial results Tuesday after the markets close, and 24/7 Wall St. wanted to look into what we should expect from the Mouse House earnings.

Thomson Reuters has consensus estimates of $1.10 in earnings per share (EPS) on $12.25 billion in revenue. This implies a slightly negative earnings growth and a 5.2% gain in revenue, compared to last year’s numbers of $1.11 in EPS and $11.65 billion in revenue.

Disney filed suit last week against Verizon Communications for allegedly violating the contract that Verizon has with ESPN for distributing the network’s sports programming. If Disney prevails, then it retains control over the content it has created, and the streaming digital world will very likely look a lot like the existing pay-TV world.

After an introduction on screens in 44 international markets that hauled in about $201 million dollars, “Avengers: Age of Ultron” debuted Thursday night in the United States with ticket sales of $27.6 million. Early predictions had the opening weekend in the United States of the latest installment of the franchise from Marvel Studios and Disney poised to surpasses the first weekend of its predecessor, “The Avengers,” which grossed $207 million at its debut.

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Disney paid $4 billion in 2009 to acquire Marvel Entertainment, the owner of Marvel Studios. Disney now owns the rights to substantially all the superheroes created at Marvel since the late 1930s, with one very significant exception: Spider-Man.

Marvel Studios released its first title, “Iron Man,” in 2008, the year before Disney bought Marvel. That was also the first film in a grouping that the studio now calls the Marvel Cinematic Universe (MCU). Eleven films have been released so far in the series, and domestic ticket sales on the first 10 movies total $2.96 billion.

Worldwide, the first 10 films have grossed $7.36 billion, and that total is expected to get significantly bigger with the domestic release this week of the 11th film in the series, “Avengers: Age of Ultron.” The 12th film in the MCU is “Ant-Man,” which is scheduled for release on July 15. In addition to these 12 films, another 10 are either in pre-production or development to carry the MCU out to the summer of 2019.

Just the day before earnings, Disney was reiterated Outperform and the price target was raised to $120 from $110 at RBC Capital Markets.

Shares of Disney were up 0.6% at $111.23 in early trading Monday, looking to push new highs. The stock has a consensus analyst price target of $110.23 and a 52-week trading range of $78.54 to $111.66.

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