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  • Wed, Nov. 16, 9:45 AM
    • Walt Disney (NYSE:DIS) has picked up 0.8% today after Deutsche Bank comes away from the Mouse's fiscal Q4 with higher confidence and an upgrade to Buy.
    • The firm has a price target of $112, implying 14% upside from yesterday's close.
    • Deutsche Bank has agreed with the investment case of a bigger return in 2018 than 2017, but is getting off the sidelines due to renewed confidence in the outlook, with ESPN fronting five reasons for optimism: Subscriber declines have improved, and the addition of more streaming bundles should help on that front.
    • There's also more clarity on cost growth in its Cable Networks programming, particularly a one-year headwind tied to the NBA contract renewal.
    • More reasons to buy: Consumer products' trough will come in the December quarter, ahead of next year's release of Cars 3 and Spider-Man: Homecoming; Next year should be the company's second-best year at the film studio despite tough comps to a record 2016; and Parks and Resorts growth should accelerate as growth and per-capita spending increase in Orlando (there are "levers to be pulled" in seasonal pricing as well).
    • Previously: Disney rides 'Doctor Strange' to best-ever domestic year (Nov. 14 2016)
    • Previously: Disney holding 2.6% gains on Iger's ESPN bullishness after miss (Nov. 11 2016)
    | Wed, Nov. 16, 9:45 AM | 12 Comments
  • Mon, Nov. 14, 2:25 PM
    • Doctor Strange is piling on to Disney's (DIS +0.4%) record studio 2016, repeating atop the box office for the second week with fairly strong legs and $43M.
    • The Marvel film outgrossed the $35M from Trolls (FOX +1.1%, FOXA +1%) and brought its domestic total to $153M and a robust worldwide gross of $492.6M. Trolls held up strong in its follow-up week, dropping just 25% W/W. Overall, the box-office weekend was up 56% Y/Y, according to Box Office Mojo.
    • Paramount's sci-fi film Arrival (VIA +1.3%, VIAB +1%) made the strongest debut, coming in third with $24M, easily surpassing Universal's Almost Christmas (CMCSA +1.7%), with $15.6M.
    • Disney now has its best year ever at the domestic box office, with $2.3B surpassing the previous high from last year.
    | Mon, Nov. 14, 2:25 PM | 18 Comments
  • Mon, Nov. 14, 1:46 PM
    • Joining in with other analyst commentary from the weekend, Argus has reiterated a Buy rating for Walt Disney (DIS +0.5%) along with a price target of $129, implying 31% upside.
    • The rare earnings miss came as Disney "gives only the most general guidance, which makes it easy for Street estimates to be off the mark,” writes Argus' Joseph Bonner. The company is "positioning itself for long-term growth."
    • That means (in accordance with management guidance) looking past a 2017 that comes with transient issues and tough comps toward a better 2018.
    • As for ESPN and subscriber woes, the right moves are happening, he says, as the company invests in BAMTech and readies over-the-top service: “While this may not end the debate over ESPN’s place in the emerging/converging cable/OTT distribution landscape, we see the BAMTech deal as a major step in the right direction and as a hedge against further traditional cable subscriber losses."
    • Previously: Disney holding 2.6% gains on Iger's ESPN bullishness after miss (Nov. 11 2016)
    | Mon, Nov. 14, 1:46 PM | 4 Comments
  • Fri, Nov. 11, 1:14 PM
    • Walt Disney (NYSE:DIS) is maintaining gains in the face of yesterday's earnings miss, now up 2.6% as investors digest results dominated by talk of ESPN and a pile of analyst commentary.
    • The stock was substantially down in postmarket trading yesterday but turned up during the company's earnings call. At which point? When CEO Bob Iger expressed bullishness about the subscriber base at troubled ESPN, as Jim Cramer notes.
    • Barclays upgraded to Equal Weight after the report, saying ESPN was "de-risked" in the call, while Goldman Sachs boosted its price target (to $109, from $108, implying 12% upside from today's price) and maintained at Neutral.
    • Goldman noted a couple of "silver linings": The Shanghai park logging 4M visitors in four months, along with expectations it will break even a year early; and plans to buy back $7B-$8B in share next year, when Goldman was expecting $3.2B.
    • Stifel Nicolaus (reiterated Hold, price target at $110) sees "a tale of two stories" at the Mouse House. "We continue to be of the view that the consumer-facing segments of the business: theme parks, studio and consumer products, continue to execute well/have a favorable outlook," the firm says.
    • But then there's the Media segment: "While the company did note that media segment subscribers are decreasing at a rate consistent with its past rate, we view this disclosure as somewhat nuanced: The disclosure is company wide across both domestic and international subscribers and that ESPN over the last few years has seen erosion greater than that of the overall company which we view will likely continue."
    • Previously: Disney earnings: ESPN hit by lower ad/affiliate sales, high costs (Nov. 10 2016)
    • Previously: Disney -3.3% on rare earnings miss; TV, products weak (Nov. 10 2016)
    | Fri, Nov. 11, 1:14 PM | 11 Comments
  • Fri, Nov. 11, 7:42 AM
    | Fri, Nov. 11, 7:42 AM | 12 Comments
  • Thu, Nov. 10, 6:06 PM
    • Disney (NYSE:DIS) has erased postmarket losses and headed sharply to positive ground (now up 2.7%) during its just-finished earnings call, during which CEO Bob Iger weighed in on ESPN and the parks business, among other subjects.
    • The company had dipped as much as 4.5% in late trading after a miss in fiscal Q4 earnings.
    • As UBS alluded to earlier, 2017 will be a challenge with real strength waiting for 2018. The company expects "modest" EPS growth for the year, CFO Christine McCarthy says, with programming costs rising 8% in Cable Networks driven by the first year of the new NBA contract (making up $600M of that increase). Parks and Resorts will benefit from a new Avatar land as well as a full year of results from Shanghai.
    • ESPN saw declines on both the ad and affiliate side, but Iger sees "new opportunities, and new deals, to improve the rate structure even more." As for subscriber losses, he reiterated his previous belief that "the causes of those losses have abated, notably the migration to smaller packages ... but new entrants [digital MVPDs] will offer ESPN opportunities ... to reach more people." More millennials will stay in the multichannel ecosystem, or get in when they hadn't before, he said.
    • "There's a lot of premature speculation" about the drop in football ratings, in "a season where postseason baseball was very strong, the election had some impact, certainly the debates did. ... It's far too early to say we're concerned."
    • Iger mostly declined comment on the election, but said the company has urged government to take a look at the corporate tax rate. "We're no longer competitive with the rest of the world in that regard," he says. "If this week means that [reform] happens sooner rather than later ... that's obviously a good thing."
    • Worry not: "We've already prepared a bust of president-elect Trump to go into our Hall of Presidents at DisneyWorld," Iger says.
    | Thu, Nov. 10, 6:06 PM | 12 Comments
  • Thu, Nov. 10, 4:39 PM
    • As feared, issues at ESPN weighed heavily on earnings at Walt Disney (NYSE:DIS), now rebounding a bit following the fiscal Q4 report, -2.5% after hours.
    • Breaking down the disappointment in Media Networks (where revenues fell 3% and operating income declined 8%): Revenues at the company's Cable Networks came to $3.96B (down 7%), while Broadcasting revenues rose 8% to $1.7B. Broadcasting also saw operating income rise 37% to $224M, while Cable Networks fell 13% to $1.45B.
    • ESPN was hit by a double whammy of lower revenues from affiliate fees and advertising matched with higher programming and production costs. Ad revenue was itself hit by fewer impressions and lower rates for those. Affiliate fees were hurt by a comparison to last year's quarter, which sported an extra week, but also by "a decline in subscribers, partially offset by contractual rate increases."
    • Parks and Resorts was another solid spot, holding serve and then some on revenues, though income was hurt by declines at Disneyland Paris and Hong Kong Disneyland.
    • The products business saw revenue drop chiefly due to discontinuing Disney Infinity, but income overall was hurt by decreases in the merchandise licensing and games businesses.
    • Previously: Disney -3.3% on rare earnings miss; TV, products weak (Nov. 10 2016)
    • Previously: UBS: Disney focus will be on fiscal 2018 (Nov. 10 2016)
    | Thu, Nov. 10, 4:39 PM | 10 Comments
  • Thu, Nov. 10, 4:23 PM
    • Walt Disney (NYSE:DIS) is off 3.3% after hours following a rare miss in its fiscal Q4 earnings as operating income fell in every segment and a decline in its TV business was matched by disappointment in consumer products.
    • EPS increased 16% on an as-reported basis, but excluding some items affecting comparability, it fell 8%. Revenues declined 3%, putting a late damper on what was a record year for revenue as well as net income and EPS.
    • Revenue by segment: Media Networks, $5.66B (down 3%); Parks and Resorts, $4.39B (up 1%); Studio Entertainment, $1.81B (up 2%); Consumer Products & Interactive Media, $1.29B (down 17%).
    • Operating income by segment: Media Networks, $1.67B (down 8%); Parks and Resorts, $699M (down 5%); Studio Entertainment, $381M (down 28%); Consumer Products & Interactive Media, $424M (down 5%).
    • Conference call to come at 5 p.m. ET.
    • Press release
    | Thu, Nov. 10, 4:23 PM | 36 Comments
  • Thu, Nov. 10, 4:17 PM
    • Walt Disney  (NYSE:DIS): FQ4 EPS of $1.10 misses by $0.06.
    • Revenue of $13.14B (-2.7% Y/Y) misses by $380M.
    • Shares -3.1%.
    • Press Release
    | Thu, Nov. 10, 4:17 PM | 37 Comments
  • Thu, Nov. 10, 3:37 PM
    • Walt Disney (DIS +0.8%), reporting earnings after the close, could get more attention for what's happening in 2018 than today, according to UBS.
    • Excluding an extra week in the quarter, analyst Doug Mitchelson sees EBIT coming in flat despite a number of challenges -- with help not only from theme parks but also ESPN (which UBS sees as offering steady affiliate fee growth).
    • And fiscal 2017 offers a number of negative factors, the firm says, including "(1) NBA step-up ~$600m; (2) Fx hedging headwinds ~$250m; (3) tough film comp against Star Wars VII ~$400m; and (4) Pension/OPEB growth due to 44bp lower interest rates ~$100m."
    • But positives include easy Shanghai launch cost comps, a boost from variable pricing at U.S. parks, the Netflix deal and retransmission revenue growth and lower write-offs at ABC.
    • "Post this difficult F4Q16, we expect investors will turn from FY17 growth concerns to anticipating FY18, where Disney’s film slate is unprecedented (4 Marvel, 2 Star Wars) and sports costs normalize," the team writes. "Further, affiliate revenue could accelerate modestly from virtual MVPD launches, annualizing the AT&T rate harmonization and mid-year CVC renewal."
    | Thu, Nov. 10, 3:37 PM | 2 Comments
  • Thu, Nov. 10, 1:28 PM
    • When Walt Disney (DIS +1%) posts earnings after the closing bell, observers will be looking for answers to a few questions (Will M&A be required to keep up with a merged AT&T/Time Warner, if it happens?) but firmly foremost is one: What's up at ESPN?
    • Disney stock has been a DJIA laggard, falling 18.5% over the past 12 months (and 10% over the past six months). And declining subscriber numbers (and along with that, affiliate fees) have played perhaps the biggest role there, overshadowing success at the box office and with theme parks.
    • Disney's expected to post EPS of $1.16 today (down 28% Y/Y) for its fiscal Q4, according to Capital IQ consensus, along with revenues of $13.52B. Along with ESPN, investors will watch for comments about media consolidation and some color on the company's film slate, which may be light in Q4 depending on the success of Star Wars stand-alone film Rogue One and animated feature Moana, and any legs from Marvel film Doctor Strange.
    • ESPN has been a concern for a few quarters now, but the questions are more urgent than ever after Nielsen noted that the network had its worst month ever in terms of subscribers, with 621,000 losses. A sharp decline in football ratings should feature into the earnings call.
    • Meanwhile, cable titan John Malone sees the possibility of an ESPN spin-off, saying Disney's being weighed down by the Worldwide Leader. "If I had to guess, what you will see is a split of Disney with ESPN spun off and, probably, ESPN could be owned and protected by a distributor in the U.S.," he says.
    • As sports rights have skyrocketed, the network has gotten expensive, Malone says. "In order to solve the issue of having to pay more every time the contract comes up, they went long ... At the moment, that looks adverse."
    • And if Disney clears itself of ESPN, he says, maybe Apple wants Disney: "Fundamentally, Tim Cook is a global player, and fundamentally, ESPN is a domestic service."
    | Thu, Nov. 10, 1:28 PM | 10 Comments
  • Wed, Nov. 9, 5:35 PM
    | Wed, Nov. 9, 5:35 PM | 8 Comments
  • Mon, Nov. 7, 7:34 PM
    • Doctor Strange (DIS +2.1%) lit up a sleepy fall box office, drawing a Marvel-esque $85M to finish No. 1 against a surprisingly strong debut from animated film Trolls (FOX +1.9%, FOXA +1.7%).
    • Disney's film, starring Benedict Cumberbatch as the title character, had already played strong in its overseas opening, and has now added $240.7M foreign box office to make a worldwide total of $325.8M.
    • Its strength also has pushed Walt Disney Studios past the $6B global box-office mark for the first time.
    • Trolls -- distributed by Fox and made by DreamWorks Animation (CMCSA +1.4%) -- grossed $46.6M domestically along with a worldwide total of $151.4M.
    • A third debut, Mel Gibson's war drama Hacksaw Ridge (LGF +7.6%), drew $15.2M after rolling out in about three-fourths as many theaters as Doctor Strange and Trolls, slotting it at No. 3 ahead of Boo! A Madea Halloween (also LGF, and grossing $7.7M).
    | Mon, Nov. 7, 7:34 PM | 13 Comments
  • Mon, Nov. 7, 2:44 PM
    • Vice Media has tightened cooperation with its investor Walt Disney (DIS +1.9%) through a production/distribution deal with ESPN that will see programming shared between the two, Vice says.
    • The moves start tonight, with Vice Sports series The Clubhouse headed to ESPN2 for an hourlong special, and blocks of Vice World of Sports will start airing tonight through December on ESPN2 as well.
    • Meanwhile, ESPN Films' documentary series 30 For 30 will air every Friday on the Viceland cable network.
    • The two had presaged the moves with program-swapping plans last spring. Disney became the largest outside stakeholder in Vice after putting $400M into the company, on top of a piece it holds through its stake in A&E Networks.
    | Mon, Nov. 7, 2:44 PM | 11 Comments
  • Fri, Nov. 4, 3:41 PM
    • After a client outcry forced Nielsen Holdings (NLSN -0.5%) to withdraw numbers that pointed to dramatic declines in subscribers for cable networks, the company now says it's standing by those earlier numbers.
    • The figures will head back to Nielsen's database on Monday. The news drew attention for marking ESPN's (DIS -0.9%) worst subscriber month ever, with a decline of 621,000 subs last month.
    • “The month over month decline in coverage that most cable networks saw was driven primarily by an overall decline of approximately half a percentage point (0.55) in the Cable Plus universe, meaning fewer households are subscribing to pay TV via traditional cable MSOs, telcos or satellite providers,” Nielsen said.
    • In a new statement, ESPN says: “This most recent snapshot from Nielsen is a historic anomaly for the industry and inconsistent with much more moderated trends observed by other respected third party analysts. It also does not measure DMVPDs and other new distributors and we hope to work with Nielsen to capture this growing market in future reports.”
    | Fri, Nov. 4, 3:41 PM | 25 Comments
  • Thu, Nov. 3, 12:32 PM
    • An epic Game 7 finale to the World Series -- where the Chicago Cubs ended a 108-year title drought by beating the almost-as-long-suffering Cleveland Indians 8-7 in extra innings -- was a ratings smash for Fox (FOX +6%, FOXA +6.2%).
    • It made for a nice 24 hours for the company, which also beat expectations with yesterday's earnings, paced by strong results at Fox News and with its film studio.
    • An estimated 39.2M viewers watched in prime-time (the game ended after midnight ET), providing a huge 12.1 rating in the adults 18-49 demographic and a 35 share.
    • The total more than doubled last year's World Series finale, where Kansas City's victory over the Mets logged 17.2M viewers.
    • Many networks bowed out with repeats last night, though ABC's (NYSE:DIS) Country Music Awards was game, drawing a 2.9 rating and an 8 share.
    | Thu, Nov. 3, 12:32 PM | 13 Comments