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Summary

  • Q3 2014 EPS reported of $1.28 per share was up 24% Y/Y.
  • Q3 revenue reported was $12.46 billion, up 7.6% Y/Y.
  • The Q3 report has confirmed my earlier opinion of the stock.

Disney (NYSE:DIS) reported earnings today that substantially beat EPS and revenue estimates. EPS came in at $1.28, which was 11 cents over analyst estimates. Revenue came in at $12.47 billion, which was $290 million above estimates. In addition, for the first nine months of fiscal 2014, the company has seen 31% EPS growth.

In its earnings press release, Disney showed strong growth in revenues for Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive (online games). However, the company reported that operating income in the Cable Networks segment decreased 7%, largely due to a decrease at ESPN because of higher programming and production costs. Cable Networks accounts for over 31% of Disney's revenue, so this is something to watch for in the future.

In my previous article about Disney titled "Disney: Put On Your Shades, The Future Is Bright - Part 2," I showed that although Disney is trading at a high P/E valuation, the company was a buy due to strong expected growth and a top-notch ecosystem. Q3 earnings report, which handily beat expectations, confirms my previous opinion of the stock and I continue to rate Disney a buy. My final sentence of that previous article sums up the company quite nicely: "Strong growth deserves high valuation."

Disclosure: The author is long DIS. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Source: Update: Disney Earnings

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