Q2 Preview: Disney (DIS) Investors Uncertain as Japan, Box Office Fears Weigh


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Walt Disney Co. ( DIS ) shares are higher ahead of the Company's second-quarter earnings report, expected out after the market closes tomorrow. The stock is up0.6 percent today.

Disney is expected to report EPS of $0.56 on revs of $9.13 billion. Last quarter, the Burbank, CA-based entertainment and media mega-conglomerate had EPS of $0.68 on revs of $10.72 billion, both mixed to the consensus. Looking back at Q210, Disney produced EPS of $0.48 on revs of $8.58 billion, beating consensus views calling for EPS of $0.46 and revs of $8.39 billion.

Shares gained about 14 percent through the quarter, to $43.09 at the end of March. The stock is up 0.5 percent since then, as is currently up 15.4 percent on the year.

Disney stock is trading with a forward P/E of 14.2x FY12 EPS estimates, compared with 13.3x at News Corp. (Nasdaq: NWSA) and 11.5x for Time Warner Inc. (NYSE: TWX).

Data from Bloomberg has 18 analysts with a Buy on Disney, 11 with a hold, and none suggesting to Sell. The analyst price target average is $49, with a high of $46 and low of $44. Shares have traded in a range of $44.34 - $30.72 over the last 52-weeks.

Analyst Summary
Goldman Sachs is looking for EPS of $0.54 on revs of $8.756 billion. Goldman says that their estimates are "slightly below consensus estimates due to new cruise ship launch costs and a write-off on Mars Needs Moms ...Broadcasting results should also benefit from Disney's television streaming deal with Netflix (Nasdaq: NFLX), which we estimate to be worth $150 million for one year, with 60% of the income attributed to Broadcasting and the remainder to Cable Networks." Goldman also included the temporary closure of Tokyo Disneyland in their model.

Janney is looking for EPS of $0.57 on revs of $8.83 billion. The firm recently revised their numbers down (from EPS of $0.64 and $8.972 billion previous) based on "the weak 1Q11 box office, notably Mars Needs Moms! and I Am Number Four . The miss by Mars was so severe (current domestic box office receipts of $20 million compared to an estimated production budget of $150 million) that impairment is likely."

Additionally, Janney notes that "Disney has the greatest exposure to uncertainty surrounding the Middle East, the ongoing risk in Japan, and an extended NFL lockout, which all continue to weigh on the stock."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: DIS

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