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Blockbuster Movies Propel Disney's Earnings

Disney (DIS) reported fiscal first quarter earnings after the bell today, posting an EPS of $1.04, beating the Zacks Consensus Estimate of $0.91.  On the revenue front, Disney beat the Zacks Revenue Estimate of $12.23 billion, by posting revenues of $12.3 billion.  This beat the year ago numbers ($0.79 EPS, and $11.34 billion revenues) by 32%, and 9% respectfully.  

The film studio division was the strong point for the company with the recent releases of “Frozen”, and “Thor-The Dark World”.  Both films were very successful at the box office.  Moreover, Disney was able to capitalize on both films success in their toy and merchandising divisions as well.  These successes caused the Studio Entertainment division to grow 28% year over year.  According to Bob Iger, Disney’s CEO, “Movies were the big driver behind this quarter’s success.”  

Mr. Iger also hit on the Music division, and stated that it was “doing very well.”  He went on to say, that the Theme Parks also were doing “very well”, and that overall the entire company saw, “double digit growth across the board.”

Today it was announced that Disney was close to a deal with Dish Networks (DISH) regarding Dish’s AutoHop (ad skipping feature) device.  It is expected that the new deal would have Dish paying a higher monthly subscriber fees for the retransmission rights for all Disney channels.  Another recent positive is the new deal with the Chinese VOD service, You On Demand Holdings Inc. (YOD).  This deal will allow You On Demand access to old and new Disney titles.  

On the negative, the recent report from the Wall Street Journal, stated that Disney was laying off several hundred employees from their interactive-media unit.  Management stated that the layoffs were due to a reorganization of the division, specifically the Playdom social gaming business.  This division had been losing over $200 million each year from 2008, to 2012.  

Most importantly to the STAR WARS fans, Mr. Iger, when pressed for news, stated that, “I know many things about the future of the film, but I can’t share anything with anyone right now.”  So unfortunately, there was no breaking news regarding the blockbuster which is supposed to open in 2015.  

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