Q2 Preview: Disney (DIS) to Benefit from Parks, Comcast Deal


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The Walt Disney Co. ( DIS ) shares are trading lower heading into the media giant's second-quarter 2012 earnings release, expected out after the market closes.

Analysts currently expect Disney to produce EPS of 57 cents on revenue of $9.58 billion. Numbers compare with EPS of 49 cents and revenue of $9.08 billion reported in the same period last year and EPS of 80 cents on revs of $10.78 billion reported last quarter.

Disney shares rose 16.8 percent through the quarter, to $43.78 at the end of March. The move is strikingly similar to a run made in last year's first-quarter, when Disney shares rose 14.9 percent to $42.38.

Into the numbers, as reported in March, Disney said it expected to record an $80 million to $100 million loss from its smash-flop "John Cater" in the quarter. For those not in the know, John Cater is: a) about a Civil War (what an oxymoron) veteran who gets transplanted to Mars and fights alien beings, and b) got a 7.0 out of 10.0 rating on IMDB despite doing horribly in theaters. Maybe it will wind up a cult classic ala "The Big Lebowski."

Some of the more notable comments on the film from IMDB users were some saying the best part of the movie was "the end credits," or "just before the opening scene," or "when Buzz Lightyear saved Woody." We think that last reviewer mis-clicked a link.

Data from Bloomberg has 20 analysts at Buy, 14 with a Hold, and none at Sell. The analyst price target average on Disney is $47, with a low of $36 and high of $56. Over the last 52-week time frame, Disney traded within a range of $28.19 to $44.50.

At $43.56 shares are also near their 50-day SMA of $42.85.

Analyst Comments

  • Goldman Sach sees EPS of 58 cents, seeing improvement in cable networking advertising as well as U.S. park revenue. The firm said, "We expect accelerating cable network ad growth due to the timing of sporting events (BCS, NBA) and strong auto advertising where ESPN overindexes. US park revenue should benefit from better employment trends, with Orlando resort tax collections pointing to a pickup in demand in fiscal 2Q."

  • JPMorgan sees EPS of 57 cents for the quarter. JPMorgan is looking for the recently renewed Comcast (Nasdaq: CMCSA) contract to kick in some upside, commenting, "We expect these higher rates to drive a modest acceleration in core affiliate growth for C2012 until a greater step up is likely seen in C2013 from the addition of ESPN, which should be nicely accretive to profitability (especially as ESPN's NFL renewal doesn't kick in until the 2014/2015 season). We forecast 8.5% core affiliate fee growth in FQ2 (+12% reported incl. lower revenue deferral) vs. FQ1's ~7.5% core rate."

    On parks, JPMorgan is looking for attendance growth of 4 percent with mid-to-high single-digit spending gains. The firm said, "We project 7.5% domestic revenue growth with 50bps margin expansion."

  • Miller Tabak sees EPS of 58 cents.

  • Deutsche Bank expects EPS of 55 cents. The firm recently boosted its outlook on several key factors, including the strength in "The Avengers" movie, Comcast exercising its A&E put (which should add $40 million tos fiscal 2013 Cable nets EIBT), and strong international Parks attendance and spending, as well as fine-tuning easy Japan comps.
Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Disney's past performance at Streetinsider's Disney's Income Statement .

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: CMCSA , DIS

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