Disney Hits New High as Movie Biz Drives Quarterly Results - Analyst Blog

The Walt Disney Company ( DIS ) is riding high following the better-than-expected third quarter fiscal 2014 results. The media conglomerate reached a 52-week high of $87.98 on Aug 11, 2014. Year-to-date, the company's market capitalization has increased 14.7%.

Terrific performance by its two blockbusters - Marvel's Captain America: The Winter Soldier and Maleficent - led the company to post the highest earnings per share in its history. The company's animated film Frozen continues to mint money and record strong sales of merchandise tied to it.

The company's earnings came in at $1.28 per share, up 27% year over year during the third quarter of fiscal 2014, beating the Zacks Consensus Estimate by roughly 9%. Moreover, revenues jumped 8% year over year to $12.466 billion, ahead of the Zacks Consensus Estimate by nearly 2.5%. Total segment operating income increased nearly 15% to $3,857 million, based on strong performance across all divisions, particularly Studio Entertainment and Interactive segments.

Moreover, Disney, which competes with Twenty-First Century Fox, Inc. ( FOXA ) and CBS Corp. ( CBS ), continues to maintain robust liquidity positions. The company ended the quarter with cash and cash equivalents of $4,090 million. During the first nine months of fiscal 2014, Disney generated free cash flow of $4,427 million, which positions it well to enhance shareholder value through share repurchases.

The acquisition of Marvel Studio has proved to be a game changer for Disney. Marvel's Guardians of the Galaxy, released last week, made a stellar debut at the box office, amassing over $94 million in its opening weekend. The success once again underscores the vast potential of Marvel Entertainment. Disney acquired Marvel studios in 2009. Ever since, Marvel has delivered a string of box-office hits for the company.

We believe that the studio will continue its success story unabated as it boasts of an impressive line-up of new movies. Among these are two of next year's highly anticipated movies namely Avengers: Age of Ultron and Ant-Man .

Along with Marvel's movies, Disney also has a couple of animated movies from Pixar lined up for 2015. Moreover, Star Wars Episode VII , Disney's most ambitious project in recent times, is slated to release on Dec 18, 2015. The segment is poised for delivering record revenues in the upcoming quarters.

Needless to say, Disney is firing on all cylinders and is expected to sustain this growth curve in the upcoming quarters.

Currently, Disney carries a Zacks Rank #2 (Buy). Another media stock worth investing in is Pearson plc ( PSO ), which carries the same rank as Disney.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CBS CORP (CBS): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

PEARSON PLC-ADR (PSO): Free Stock Analysis Report

TWENTY-FST CF-A (FOXA): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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

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

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More