Investors Await Disney TV Update -- WSJ
May 08 2017 - 3:02AM
Dow Jones News
By Ben Fritz
Walt Disney Co. investors will be paying more attention than
ever to the media giant's huge but challenged television business
as the company reports fiscal second-quarter financial results
Tuesday.
The future of Disney's TV division, particularly ESPN, has long
been the focus of anxious Wall Street analysts since its growth
started slowing two years ago amid subscription declines for
pay-cable packages. Wariness is even higher now, though, after a
top executive at Time Warner Inc. last week warned about an
advertising slowdown and after the biggest-ever first-quarter
decline in pay TV subscriptions.
Investors will want to know whether the many deals Disney has
signed with low-price "slim" internet TV bundles like YouTube TV
are ameliorating subscriber declines. They also will be looking for
an update on the "over-the-top" digital ESPN product Disney has
said it would launch by the end of the year.
The company's theme-parks unit is also likely to get attention
at the one-year anniversary of Shanghai Disney Resort approaches in
June. Investors will want an update on the park's performance --
particularly whether it is on track to meet its goals of 10 million
visitors and break-even financial results.
Wall Street may also want to set expectations for the new
"Avatar"-themed land opening at the Animal Kingdom park at Walt
Disney World in Orlando this month and whether it could help
maintain growth in the domestic parks business, which has been on a
tear recently.
After a monster fiscal 2016, Wall Street has been expecting a
comparatively slow 2017 from Disney's film business. It is
releasing only eight films, compared with 13 the prior year -- two
of which were on behalf of partner DreamWorks, under a deal that
has expired -- and 11 in the next.
But with March's "Beauty and the Beast" grossing $1.1
billion-plus and "Guardians of the Galaxy Vol. 2" on its way to a
total nearly that big, following the hits "Rogue One," "Moana" and
"Doctor Strange," declines at the studio could be quite minor after
all. Investors will want to know what impact "Beauty" is having on
the movie studio and consumer products this year before
contemplating what looks like a few blockbuster years to come, with
an accelerating pace of Marvel and "Star Wars" films as well as a
"Frozen" sequel.
Tuesday will be the first earnings call since Chief Executive
Robert Iger in March extended his contract for another year, to
July 2019. Though Mr. Iger has previously been tight-lipped on
earnings calls about the search for a successor, analysts may
nonetheless ask about progress in figuring out who will be running
the world's biggest media conglomerate in two years.
Disney is expected to report net income of $1.41 a share for the
quarter, according to the consensus of analysts surveyed by Thomson
Reuters, compared with $1.30 a share a year earlier. Revenue is
expected to be $13.45 billion, up from $12.97 billion a year ago.
Disney doesn't provide earnings guidance.
Write to Ben Fritz at ben.fritz@wsj.com
(END) Dow Jones Newswires
May 08, 2017 02:47 ET (06:47 GMT)
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