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The Walt Disney Company (DIS)

  • Fri, Aug. 21, 3:25 PM
    • Walt Disney (NYSE:DIS) is having a (relatively) decent day, down just 0.5% amid a marketwide meltdown that's deepening toward the close.
    • Analysts have been coming in with updates after a rough month for the Mouse, down 18.4% since releasing earnings that disappointed investors Aug. 4. Cowen & Co. reiterated their Market Perform rating while lowering the stock's price target to $89, from $98.
    • Shares closed yesterday at $100.02. A somewhat more bullish Barton Crockett at FBR reiterated their rating of Outperform and $124 target, looking at near-term positive catalysts -- particularly merchandise coming in just two weeks for what might be "the biggest movie series ever": Star Wars.
    • "We do not think that level of retail support for a movie has ever happened before, setting this up to be the most merchandizable movie series ever," he writes. Retailers are set to open at midnight Sept. 4 to push a first batch of paraphernalia.
    • Meanwhile, the return of fooball has him relatively unconcerned about ad sales and affiliate fees, which Disney guided to grow in the high single digits.
    • Previously: Disney, Comcast enjoying summer of (box-office) love (Aug. 20 2015)
    • Previously: Disney, Time Warner lower as Bernstein downgrades on fee worries (Aug. 20 2015)
    • Previously: Disney expo: Previewing new 'Toy Story,' 'Finding Dory' (Aug. 15 2015)
    | Fri, Aug. 21, 3:25 PM | 18 Comments
  • Thu, Aug. 20, 7:07 PM
    • How much are Disney and (especially) Comcast's Universal dominating the box office this summer (and, along with that, the year)? Enough that the two studios have combined for 61% of domestic ticket sales since the first Friday in May.
    • With a few weeks left until Labor Day, the summer grosses in North America could come to $4.4B, an all-time record.
    • The two studios have just over 47% of market share for 2015 to date, and seven of the year's top 10 grossing films.
    • Warner Bros. (NYSE:TWX) is the best of the also-rans, with 14.3% share of the summer box office and 16.7% of 2015. But a relative lack of summer success from Fox (FOX, FOXA), Paramount (VIA, VIAB), Sony (NYSE:SNE) and Lionsgate (NYSE:LGF) presages a tough fall ahead for most.
    • Disney's scores have come with just eight films this year, vs. Universal's 12 and Warner's 17. Paramount had just two films out this summer. Lionsgate's only two summer films are Shaun the Sheep and this weekend's American Ultra, though it can look ahead to the final film in its Hunger Games series due in November.
    • Disney (NYSE:DIS) is up 6.2% YTD (and was up 29% for 2015 until this month's media meltdown); Comcast (NASDAQ:CMCSA) is up 0.6% YTD (and was up 12% at its late-July high point).
    • Previously: 2015 box office: Universal 138% ahead of 2014 pace with $1.38B home grosses (Jul. 04 2015)
    | Thu, Aug. 20, 7:07 PM | 7 Comments
  • Thu, Aug. 20, 9:49 AM
    • Walt Disney (DIS -3.1%) and Time Warner (TWX -2.3%) are both off following downgrades from Sanford Bernstein, to Market Perform, on the usual worries about affiliate fees.
    • The market is valuing ad-supported TV businesses as "structurally impaired assets," Bernstein's Todd Juenger writes, which is "fair and warranted, because: a) we believe TV advertising is undeniably in secular decline; and b) affiliate fees are now also being put at increased risk."
    • One media name that deserves conviction, by contrast, is Twenty-First Century Fox (FOX -1.1%, FOXA -1%), he says: "There is simply too much growth in FY17-18 to keep the stock below ~$40," but even so he's cautious in nearer-term quarters.
    • Investors will go long and short on media dependent on their feelings about cord-cutting and affiliate fees, he says, but enough complexities still exist in the sector to create opportunities.
    | Thu, Aug. 20, 9:49 AM | 81 Comments
  • Wed, Aug. 19, 5:57 PM
    • While it was Walt Disney (NYSE:DIS) that got the blame for a media sector downturn earlier this month amid worries about cord-cutting (spurred by the Mouse House's talk about ESPN subscriber losses), it's not the one who might suffer the most from declining fees.
    • Sanford Bernstein did an analysis of media companies' exposure to drops in per-subscriber fees, and while Disney was in the middle of the pack -- earnings would fall 8.7% if domestic affiliate fees fell 10% -- the company with the greatest exposure is AMC Networks (NASDAQ:AMCX), whose EPS would fall 16.6% with a 10% fee drop.
    • On the other end of the spectrum, the company most insulated is CBS. Its earnings would fall only 3.2% with the same 10% decline in domestic affiliate fees; while it has exposure to cable subscriptions via Showtime, it's primarily a broadcast network.
    | Wed, Aug. 19, 5:57 PM | 15 Comments
  • Tue, Aug. 18, 8:07 PM
    • Despite no publicity-generating GOP debate this time, Fox News (FOX, FOXA) finished last week as the most-watched primetime cable net for the second week in a row.
    • Nielsen says Fox News averaged 1.8M viewers to top the Disney Channel's (NYSE:DIS) 1.7M average and TNT's (NYSE:TWX) 1.6M viewers. TNT had the top two shows with its consistently strong-performing Major Crimes (4.4M viewers) and Rizzoli & Isles (4.3M).
    • On a 24-hour basis, it was children's programming that won again: Disney Channel and Nickelodeon (VIA, VIAB) tied for the lead with 1.3M viewers.
    • In the adults 18-49 demographic: TBS won primetime, and USA Network (NASDAQ:CMCSA) prevailed on a 24-hour basis.
    | Tue, Aug. 18, 8:07 PM | 16 Comments
  • Tue, Aug. 18, 11:21 AM
    • Some "old-line" media stocks are trading lower off a sector-wide downgrade from Wells Fargo, which has put a rating of Market Weight on diversified media.
    • A number of Outperform ratings were cut to Market Perform: For CBS, now down 1.7%; for Walt Disney (NYSE:DIS), -1.5%; and Twenty-First Century Fox (FOX -0.6%; FOXA -1.2%).
    • In Disney's case, the analysts pointed to lighter guidance internationally for Star Wars and developments at its Shanghai park as catalysts to watch.
    • Ratings challenges justify headwinds at CBS and Fox, Wells Fargo noted.
    • Wells also downgraded Gannett broadcast spinoff TEGNA (TGNA -1.5%) to Market Perform.
    | Tue, Aug. 18, 11:21 AM | 28 Comments
  • Sat, Aug. 15, 2:05 PM
    • Kicking off its D23 Expo Friday, Disney (NYSE:DIS) used day one to preview an animation slate that includes the latest in its lucrative Toy Story franchise, as well as a musical adaptation of the Jack and the Beanstalk story.
    • Pixar teased info about Toy Story 4 -- featuring a love story for lead toy Woody (Tom Hanks) with Bo Peep (Annie Potts) -- with help from Randy Newman performing his award-winning You've Got a Friend in Me theme.
    • Finding Dory, a sequel to 2003's Finding Nemo, returns Ellen DeGeneres as a forgetful fish working to find her family. That film is set for release June 17.
    • Gigantic will be a Jack and the Beanstalk adaptation that includes songs from the Frozen team of Robert Lopez and Kristen Anderson-Lopez, and features a 60-foot-tall, 11-year-old girl who meets Jack at the top.
    • The three previous Toy Story films have grossed just under $2B combined worldwide, while Finding Nemo drew $380.8M domestically and $936.7M as a global total.
    • The day also featured peeks at the South Pacific-set Moana (featuring Dwayne Johnson) and animal story Zootopia, and news that the long-delayed The Good Dinosaur was set to come out this Thanksgiving.
    • On today's agenda: Star Wars and Marvel plans.
    | Sat, Aug. 15, 2:05 PM | 29 Comments
  • Mon, Aug. 10, 2:26 PM
    • Fox's expensive reboot of Fantastic Four might face a write-off after stumbling from the box-office gate this weekend amid bad word-of-mouth and critical reviews.
    • Fox (FOX -1.4%, FOXA -0.1%) inherited the Marvel property and had hopes for a hero franchise that could rival X-Men, though the film will need a huge overseas reception to realize those dreams.
    • The $26.2M it earned was below expectations of $40M, ensuring it finished second behind Paramount's Mission: Impossible -- Rogue Nation (VIA +2.2%, VIAB +2.5%), topping the box office with $29.4M ($108.7M in its two weeks).
    • Among longer-term August players, Ant-Man (DIS +1%) earned $7.8M to bring its domestic total to $147.4M in four weeks, and Minions (CMCSA +1.3%) drew $7.4M to total $302.8M in five weeks.
    | Mon, Aug. 10, 2:26 PM | 33 Comments
  • Thu, Aug. 6, 1:01 PM
    • Disney (NYSE:DIS) is down another 5.2% today (down 13.7% in two days) amid a deepening media stock sell-off that it seems to have spurred with its Tuesday earnings report, where it took a fair chunk of time on an analyst call acknowledging subscriber losses at ESPN.
    • Also off broadly at midday: CBS -3.1%; CMCSA -4%; FOXA -9.8%; VIAB -15.6%; TWX -5%; AMCX -9.6%; LGF -6.7%.
    • The sell-off is affecting several companies with a cable or pay-TV component, as sub losses at ESPN -- the most valuable part of any cable bundle -- point to the effect of cord-cutting.
    • Analysts are agreeing that the trend of unbundling (or skinny bundling) might threaten the long-term health of the pay TV ecosystem, which has profited from the promise of rising subscription fees from providers. That's dependent on subscriber counts that don't significantly drop off.
    • A growing pile of reports this week is indicating warning signs for subscriber counts. Dish Network (DISH -2.2%) had "almost certainly the worst quarter" for satellite subscriber losses, analyst Craig Moffett noted, as it merged Sling TV subscriber growth into its overall count, masking the core number. Moffett estimates Dish lost 151K satellite TV customers in Q2.
    • Subscriber losses mean lower affiliate fees. Disney said in its call "we now expect domestic cable affiliate revenue [growth] to fall short of previous expectation, but still in high single digits."
    • Other industry decliners: CRWN -8.9%; QVCA -5.4%; STRZA -6.1%
    • Previously: Disney tumbles 8.9% after revenue miss; Iger talks ESPN again (Aug. 05 2015)
    • Previously: Disney's Iger bullish on ESPN despite consumer changes, unbundling (Aug. 04 2015)
    | Thu, Aug. 6, 1:01 PM | 28 Comments
  • Wed, Aug. 5, 9:45 AM
    • Walt Disney (NYSE:DIS) sellers have piled onto yesterday's postmarket decline, as the stock comes out of the open down 8.7% after a revenue miss as international theme park growth slowed and interactive sales declined.
    • After a recent push to all-time highs, Disney stock is at its lowest point in seven weeks.
    • On CNBC this morning, Bob Iger talked about his full-throated defense of ESPN on yesterday's earnings call.
    • "Our business has performed extremely well, and we have a very, very strong outlook going forward, but we felt that given the importance of ESPN to the company and cable networks in general, that it was important for us to be candid about what we see in the environment. Simple as that," Iger said.
    • He repeated that Disney was bullish on the cable business and ESPN specifically. "We did want to note the sub losses that we had seen. We also have an NBA deal that kicks in in 2017. But after 2017 we believe ESPN is going to deliver very compelling growth for this company."
    • "I think it's a huge buying opportunity," said Tigress Financial Partners' Ivan Feinseth. "I'm actually shocked it's down, but I've often said you never buy a stock for what just happened, you buy a stock for what's going to happen over the next few years."
    • Previously: Disney's Iger bullish on ESPN despite consumer changes, unbundling (Aug. 04 2015)
    • Previously: Disney -2.3% as Q3 revenues fall short; profits up 11% (Aug. 04 2015)
    | Wed, Aug. 5, 9:45 AM | 74 Comments
  • Wed, Aug. 5, 9:19 AM
    | Wed, Aug. 5, 9:19 AM | 11 Comments
  • Tue, Aug. 4, 6:50 PM
    • CEO Bob Iger took a large chunk of time at the beginning of the Walt Disney (NYSE:DIS) earnings call to vigorously defend ESPN -- a nod to recent rampant discussion about the sports empire's fortunes in the new multichannel environment.
    • "We're realists about the business and about the impact technology has had," Iger said. "We're also quite mindful about trends in younger audiences in particular."
    • "ESPN has experienced some modest sub losses -- though those are less than reported by a prominent research firm," Iger said. "And the vast majority of them, 80%, are due to decreases in multi-channel households ... only a small percentage due to skinny bundles." Nielsen has said that ESPN has lost 3.2M subscribers in just over a year.
    • In the company's fiscal Q3 results, it noted that operating results at ESPN were driven by affiliate revenue growth even as ad revenue declined. Subscriber numbers were goosed by the August 2014 launch of the SEC Network. Lower ad revenues "reflected lower ratings and rates."
    • Last week Iger suggested that ESPN could go direct to consumers (over-the-top) eventually, but today talked up the standard program bundle and said unbundling is still "a positive trend for us ... ESPN is a must-have brand," not only No. 1 in sports media but the leader in live programming. "Ninety-six percent of all sports programming is watched live," he said, particularly valuable in today's ad marketplace.
    • Another concern tackled in the call was currency-exchange headwinds. New CFO Christine McCarthy said Disney was updating its old long-term guidance through 2016, seeing $500M in forex effects for revenue. And "due to lower sub levels, we now expect domestic cable affiliate revenue [growth] to fall short of previous expectation, but still in high single digits."
    • DIS is now down 6.3% after hours.
    • Previously: Disney -2.3% as Q3 revenues fall short; profits up 11% (Aug. 04 2015)
    | Tue, Aug. 4, 6:50 PM | 10 Comments
  • Tue, Aug. 4, 4:40 PM
    • Walt Disney (NYSE:DIS) is off 2.3% in late trading following its fiscal Q3 report, where revenues fell short of analyst expectations even as profits grew 11% from the prior year and beat for the 11th straight quarter.
    • Revenues by segment: Media Networks, $5.77B (up 5%); Parks & Resorts, $4.13B (up 4%); Studio Entertainment, $2.04B (up 13%); Consumer Products, $954M (up 6%); Interactive, $208M (down 22%).
    • Interactive was the disappointment in revenues, held down by Disney Infinity sales. In Media Networks, profits were up 7% in the Cable Networks group, while slumping 15% in Broadcasting, thanks to higher costs for programming and labor and lower ad revenue.
    • Parks & Resorts income was up 9%, to $922M, on domestic strength (volume, and growth in per-guest spending). Attendance was down in Hong Kong, and costs were higher there and in Paris.
    • Studio Entertainment benefit from good comps of Avengers: Age of Ultron compared to last year's Captain America: The Winter Soldier. Tomorrowland was a drag -- but no write-down mentioned.
    • For the nine months: Free cash flow was $4.5B, up $93M Y/Y. Capex increased to $3.1B, from $2.2B, mainly due to higher construction spending for Shanghai Disney.
    • Conference call to come at 5 p.m. ET.
    • Press Release
    | Tue, Aug. 4, 4:40 PM | 32 Comments
  • Tue, Aug. 4, 4:21 PM
    • Walt Disney (NYSE:DIS): FQ3 EPS of $1.45 beats by $0.03.
    • Revenue of $13.10B (+5.1% Y/Y) misses by $130M.
    • Shares -2.01%.
    • Press Release
    | Tue, Aug. 4, 4:21 PM | 28 Comments
  • Mon, Aug. 3, 5:35 PM
  • Mon, Aug. 3, 1:19 PM
    • One big film question coming into August was whether Tom Cruise was too old to still carry an action movie; Mission: Impossible -- Rogue Nation (VIA, VIAB) answered its own way, dominating the box office with $56M domestically, including $20.3M on Friday, a first-day high for the franchise.
    • That's well ahead of $40M projections and even further ahead of another debut, the remade Vacation (NYSE:TWX), which drew $14.9M, good for second place.
    • They were followed by a series of films doing repeat business: Ant-Man (NYSE:DIS), third with $12.6M ($132.2M in three weeks); Minions (NASDAQ:CMCSA), fourth with $12.2M ($287.4M in four weeks); and Pixels (NYSE:SNE) in fifth with $10.4M ($45.6M in its two weeks).
    • Worldwide, the new M:I has hit $121M -- adding $65M internationally to its $56M domestic. The film's outperformed the franchise's previous entry, Mission: Impossible -- Ghost Protocol by 49% in the same markets.
    • Rogue Nation is set to open in China on Sept. 8; it was the biggest international market for Ghost Protocol, with $101M in receipts.
    | Mon, Aug. 3, 1:19 PM | Comment!
Company Description
Walt Disney Co, together with its subsidiaries, is a diversified entertainment company with operations in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive.