Earnings Preview: The Walt Disney Company

The Walt Disney Company (DIS) is expected to report Q4 earnings after market close Thursday, November 6, with a conference call scheduled for 4:30 pm ET.

Guidance

Analysts are looking for a profit of 49c on revenue of $9.34B. The consensus range is 43c to 56c for EPS, and revenue of $9B to $9.73B, according to First Call. Between soaring food and gas prices, limited credit and worries about jobs, consumers cut back spending on discretionary items. In fact, executives are bracing for a worsening economy and further declines in ad spending. As a result, the LA Times reported on October 31 that executives have been meeting to discuss cost-cutting measures that may include possible company-wide layoffs.

Analyst Views

Cowen analyst Doug Creutz says the company is likely to be hurt by the impact of the downturn in consumer spending on its theme park business, which accounts for nearly a quarter of Disney's revenues. Creutz believes Disney will also be hit by the downturn in ad spending, as that will impact its television networks, and will have a "difficult" time beating this year's theatrical line up.

Merrill Lynch analyst Jessica Reif Cohen also believes Disney will be hurt by the slowing economy, and said the "most significant reductions" are in the parks and broadcasting. At the same time, Citigroup believes the recent strength in the U.S. dollar may cause Disney World attendance to moderate and points out that year-over-year room pricing is down roughly 30% at both Disneyland and Disney World; however, even if there are solid Q3 results, the firm expects weakness in Q4.