Disney Earnings: What to Watch
February 07 2017 - 5:59AM
Dow Jones News
By Ben Fritz
Walt Disney Co. is scheduled to announce its fiscal
first-quarter earnings after the market closes Tuesday. Here's what
you need to know:
EARNINGS FORECAST: Net income of $1.50 a share is the consensus
of analysts surveyed by Thomson Reuters, down from $1.63 reported a
year earlier. The company doesn't provide earnings guidance.
REVENUE FORECAST: Analysts expect revenue of $15.27 billion,
slightly above the $15.24 billion reported a year earlier.
WHAT TO WATCH:
-- CABLE DECLINES AND THE FUTURE OF ESPN: A big drop in Disney's
television business, led by ESPN, caused a rare miss for the
entertainment giant as its earnings came in below Wall Street
expectations in the quarter that ended in October. With headlines
continuing to abound over struggles for the pay-television business
and consumers' migration to streaming services, investors will
first and foremost dissect Disney's results for signs of whether
the bad news is abating or accelerating. They will also be eager
for more details on the company's plan to offer some ESPN content
"over the top" in a direct-to-consumer offering expected to launch
later this year.
-- STAR WARS PRODUCTS: The 2015 holiday season was huge for
Disney's consumer products, in large part due to the launch of the
company's first "Star Wars" movie. This past December's "Star Wars"
spinoff, "Rogue One," was a hit, but not on the same level as "The
Force Awakens, " which has made more money than any other at the
domestic box office. Analysts will be eager to know if toy and
clothing sales fell similarly short of the high bar set by "The
Force Awakens." Chief Financial Officer Christine McCarthy said at
an investor conference in early January that results for the
consumer-products unit would be down about 20% year-over-year.
-- OUTLOOK FOR THE YEAR: Ms. McCarthy presented a generally
somber outlook for Disney's fiscal 2017, citing tough comparisons
for the movie and consumer-products businesses as well as a rise in
sports-rights costs at ESPN due to a new contract with the National
Basketball Association. Any signs that 2017 is turning out a little
better than expected is sure to excite investors, most of whom are
already looking forward to 2018.
-- POLITICS: International tourism is a big source of income for
Disney's parks and resorts business, which draws many foreigners to
its two resorts in the U.S. and has three locations overseas. Will
conflicts sparked in the first two weeks of President Donald
Trump's administration affect attendance at Disney theme parks in
the U.S. and abroad? CEO Bob Iger will likely be asked the delicate
question of what impact he thinks the new president could have on
the company in the months and years to come.
(END) Dow Jones Newswires
February 07, 2017 05:44 ET (10:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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