Mega Hit Toy Story 3 Helps Disney Shine

Aug.11.10 | About: The Walt (DIS)

By Carolyn Austin

It’s getting to be a bit old hat, but Disney (NYSE:DIS) is another company beating earnings estimates this season and reporting a jump in revenues. Many companies reporting earnings are easily beating their numbers from 2009, when the recession was hitting its stride.

The Disney report is stronger than most, however, due to big returns from recent movie releases, such as Toy Story 3, Alice in Wonderland, and Iron Man 2, which added significantly to the bottom line, as did the World Cup on ESPN.

DIS reported third-quarter earnings per share at $0.67, beating estimates at $0.58 per share and last year's EPS figure of $0.52. Revenues increased 16.4 percent to $10 billion from $8.6 billion for the same period a year ago.

In a canned statement, President and Chief Executive Officer Robert A. Iger said:

We’re very pleased with our strong third quarter, in which we grew revenues substantially and improved profitability across the majority of our businesses. Our performance underscores the value of sticking to a smart strategy even in tough times, of investing in the right people, and of focusing relentlessly on quality and innovation to drive growth in shareholder value.

For the nine months ending this quarter, the company reported an 8 percent growth in revenues and a 22 percent jump in operating income.

The cable networks and broadcasting segment showed healthy increase in revenue (up 11 percent) and income (up 19 percent), followed by Studio entertainment revenues (up 10 percent) relating to the recent movie releases.

Disney Company

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Comments: Not unlike many companies, Disney is reducing investment, restructuring debt, and selling or writing off assets. No surprises in the earnings release, just good solid fundamentals and performance from Disney. This is reflected in the current stock price, which is trading near its 52-week high. The Parks and resorts segment is still struggling, and this may be the end of the Toy Story saga, but Disney has more cards to play. The stock should outperform for the year and is up another $0.40 in after hours trading.

Disclosure: No positions