Disney’s Q4 Earnings Report: What to Expect

Disney $DIS is set to report there Q4 2018 results today, November 8th, after the closing bell.

For the third quarter this year, Disney reported revenue of $15.2 billion, up 7% year over year, while adjusted earnings per share of $1.87 jumped 18%. Both numbers were lower than analysts’ consensus estimates. What changes did Disney make after the third-quarter which may influence their fourth-quarter earnings report?

Disney’s stock price has increased slightly over the course of 2018, primarily because of their focus on the new online streaming media service (which already has more than one million paid subscribers)  and the acquisition of assets from Fox.

According to Forbes, Disney is expected to post an increase in earnings and revenue. In the upcoming earnings release, they expect the studios to benefit from the release of Ant-Man and the Wasp and Incredibles 2. Forbes expects a relatively strong fourth quarter for the company with respect to its Studio Operations and Consumer Products segment, as “Ant-Man and the Wasp” has already collected more than $200 million at the domestic box office, which is more than the entire studio collection for fiscal Q4 last year.

Bank of America is predicting third-quarter EPS of $1.84 on revenue of $15.29 billion for Disney.

“Despite well-telegraphed uncertainties surrounding the legacy TV industry, we believe DIS’s best-in-class and execution position the company for continued growth as it scales up in content and enhances geographic diversification and more aggressively pursues streaming growth opportunities,”

Jessica Reif, Analyst of Bank of America

Bank of America has a “buy” rating and $144 price target for $DIS.

In addition, increases in earnings and revenue can also be driven by continued growth at Parks & Resorts, particularly internationally, as well as a healthy film slate.

The company keeps investing in its parks with the recent opening of the new Toy Story Land at the Shanghai Disneyland. Disney also plans to open a new Star Wars Land in 2019 at both the Disneyland and Walt Disney World locations. Disney is currently up more than 7% in 2018, topping the S&P 500’s 2% increase.

Last year, the fourth-quarter Earnings Report wasn’t the best for Disney. Revenue fell to $12.8 billion, falling short of Wall Street’s projections of $13.23 billion. At the same time, the company’s posted per-share earnings of $1.13 beat Thomson Reuters consensus estimates of $1.12 per share.

Wall Street’s Estimates

EPS (Average Estimate): $1.33/share

Q4 Revenue (Average Estimate): $13.72B

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