Earnings Preview: Disney 3Q expected higher

Family entertainment giant The Walt Disney Co. reports its fiscal third-quarter earnings after the stock market closes Tuesday.

WHAT TO WATCH FOR: A revival in advertising revenue. Like its other media company peers, Disney is likely to see a boost from companies spending their way to growth with marketing dollars that were pulled back during the recession. That spending will benefit its ESPN cable channels and ABC broadcast network.

The house that Mickey Mouse built also may discuss a readjustment of its assets. It recently sold off its Miramax Films division and bought two casual game companies, Playdom and Tapulous.

The company will also address how its theme parks have been performing. This month, it raised ticket prices at Walt Disney World in Orlando, Fla., indicating a further move away from its recession-driven discounts.

Its movie studio has had a share of hits and misses, although it is expected to handily beat its performance from a year ago when it posted a loss.

Blockbusters “Iron Man 2” and “Toy Story 3” are expected to boost results, while analyst Doug Creutz of Cowen & Co. is expecting a write-down on “Prince of Persia” and “Sorcerer’s Apprentice.”

WHY IT MATTERS: While a rebound in advertising revenue is largely expected given that other companies, including Time Warner Inc. and News Corp., have already reported their quarterly results, Disney’s theme park performance could indicate how consumers are feeling about the economy.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect Disney to earn 58 cents per share on sales of $9.38 billion.

LAST YEAR’S QUARTER: Disney earned an adjusted 52 cents per share on revenue $8.60 billion.


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