DIS Walt Disney Co

By Ben Fritz 

Walt Disney Co. is scheduled to announce its fiscal second quarter earnings after the market closes Tuesday. Here's what you need to know:

EARNINGS FORECAST: Net income of $1.41 a share is the consensus of analysts surveyed by Thomson Reuters, compared with $1.30 reported a year earlier. The company doesn't provide earnings guidance.

REVENUE FORECAST: Analysts expect revenue of $13.45 billion, compared with $12.97 billion reported a year earlier.

WHAT TO WATCH:

TV ADVERTISING AND SUBSCRIPTIONS: The future of Disney's huge television business, particularly ESPN, has long been the focus of anxious Wall Street analysts and that is sure to be true again this quarter, particularly after a top executive at Time Warner Inc. 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-priced "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 will launch by the end of the year.

SHANGHAI ANNIVERSARY AND AVATAR OPENING: Shanghai Disney Resort will be one year old in June and investors will want an update from Chief Executive Roger Iger on the park's performance -- particularly whether it is on track to meet previously stated goals of 10 million visitors and break-even financial results. Wall Street may also want to set expectations for the opening of a new "Avatar"-themed land at the Animal Kingdom park at Walt Disney World in Orlando, Fla., and whether it could help maintain growth in the domestic parks business, which has been on a tear recently.

STUDIO SLOWDOWN AVERTED? After a monster fiscal 2016, Wall Street has been expecting a comparatively slow 2017 from Disney's film business, which is releasing only eight films, compared with 13 the prior year (two 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 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 the next several years, which appear to be packed with likely blockbusters, including an accelerating pace of Marvel and "Star Wars" films along with a "Frozen" sequel.

SUCCESSION UPDATE: This will be the first earnings call since Mr. Iger 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 on who will be running the world's biggest media conglomerate in two years.

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

May 08, 2017 10:14 ET (14:14 GMT)

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