Earnings Preview: Disney (DIS) Should See a Strong Quarter from Ad Sales, Increased Pricing (NWSA, CBS, TWX)
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Shares of Walt Disney (NYSE: DIS) are slightly lower ahead of the company's third quarter earnings report, expected out after the market closes today. Shares are down 0.5% to $35.00 in the afternoon session today.
DIS is expected to report EPS of $0.58 on revs of $9.38 billion. For the second quarter, the company posted revs of $8.58 billion and EPS of $0.48, compared to the consensus of $8.39 billion in revs and an EPS of $0.46. Last year, for Q309, the Burbank, California-based company posted EPS of $0.52 on revs of $8.6 billion, mixed to the consensus EPS of $0.51 and revs of $8.83 billion.
Shares of Disney ended the quarter about 8.6% lower to $31.50 at the end of June. The stock is up about 9.3% since the start of 2010.
A basic valuation gives us a forward P/E of 17.2x FY10 EPS estimates, compared to 14.9x for CBS Corp. (NYSE: CBS), 12.8x for News Corp. (Nasdaq: NWSA), and 14.2x for Time Warner Inc. (NYSE: TWX).
Data from Bloomberg has 16 analysts with a Buy rating, 13 with a Hold, and one with a Sell rating on the shares. The analyst price target average is $38.90, with a high of $42, and a low of $33.
Analyst Ratings Through the Quarter
In April, Soleil upgraded the shares from Hold to Buy with a price target boosted from $30 to $42.
Jefferies increased its price target from $36 to $41 on DIS shares, while maintaining a Buy rating on the shares.
Following Q210 results, Citi upgraded the shares from Sell to Hold.
At the end of June, Goldman Sachs upgraded the shares from $33 to $42.
Summary
JMS Equity research sees park revs up 1.7% to $530 million, which reflects a 3.1% decrease in attendance coupled with a 7% increase in spending. They note that their estimates may be a little conservative. Janney has an EPS estimate of $0.60 on the shares, with $9.265 billion in revs. JMS maintains their Neutral rating and $36.00 price target on the shares.
Needham & Company expects Q3 revs of $9.378 billion, and recently increased their EPS estimate from $0.56 to $0.58. They increased their view based on a strong run by "Toy Story 3" as well as better than expected DVD sales for "Alice in Wonderland." "Iron Man" and stronger Cable Networks ad sales are also expected to contribute. Needham has a Hold on the company.
Items discussed in the conference call may include readjustment of company assets as Miramax was recently sold, and DIS also acquired Playdom and Tapulous. Questions will surround how traffic at their parks is fairing; many analysts are expecting a 1% to 5% or more drop in attendance, which should be offset by an increase in prices.
Walt Disney Co. is expected to release their Q310 earnings on Tuesday, August 10, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
DIS is expected to report EPS of $0.58 on revs of $9.38 billion. For the second quarter, the company posted revs of $8.58 billion and EPS of $0.48, compared to the consensus of $8.39 billion in revs and an EPS of $0.46. Last year, for Q309, the Burbank, California-based company posted EPS of $0.52 on revs of $8.6 billion, mixed to the consensus EPS of $0.51 and revs of $8.83 billion.
Shares of Disney ended the quarter about 8.6% lower to $31.50 at the end of June. The stock is up about 9.3% since the start of 2010.
A basic valuation gives us a forward P/E of 17.2x FY10 EPS estimates, compared to 14.9x for CBS Corp. (NYSE: CBS), 12.8x for News Corp. (Nasdaq: NWSA), and 14.2x for Time Warner Inc. (NYSE: TWX).
Data from Bloomberg has 16 analysts with a Buy rating, 13 with a Hold, and one with a Sell rating on the shares. The analyst price target average is $38.90, with a high of $42, and a low of $33.
Analyst Ratings Through the Quarter
In April, Soleil upgraded the shares from Hold to Buy with a price target boosted from $30 to $42.
Jefferies increased its price target from $36 to $41 on DIS shares, while maintaining a Buy rating on the shares.
Following Q210 results, Citi upgraded the shares from Sell to Hold.
At the end of June, Goldman Sachs upgraded the shares from $33 to $42.
Summary
JMS Equity research sees park revs up 1.7% to $530 million, which reflects a 3.1% decrease in attendance coupled with a 7% increase in spending. They note that their estimates may be a little conservative. Janney has an EPS estimate of $0.60 on the shares, with $9.265 billion in revs. JMS maintains their Neutral rating and $36.00 price target on the shares.
Needham & Company expects Q3 revs of $9.378 billion, and recently increased their EPS estimate from $0.56 to $0.58. They increased their view based on a strong run by "Toy Story 3" as well as better than expected DVD sales for "Alice in Wonderland." "Iron Man" and stronger Cable Networks ad sales are also expected to contribute. Needham has a Hold on the company.
Items discussed in the conference call may include readjustment of company assets as Miramax was recently sold, and DIS also acquired Playdom and Tapulous. Questions will surround how traffic at their parks is fairing; many analysts are expecting a 1% to 5% or more drop in attendance, which should be offset by an increase in prices.
Walt Disney Co. is expected to release their Q310 earnings on Tuesday, August 10, 2010, at approximately 4:00pm EDT. Stay tuned to StreetInsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.
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