Disney Earnings Preview
DISNEY (DIS)
Good ol' family entertainment: Movies, TV, entertainment parks. Dow component.
Reports Q1 earnings Tuesday, Feb. 5 at 401p ET. Conference call at 430p ET.
WHAT WILL MOVE THE STOCK:
ECONOMY/OUTLOOK - Are concerns about a slowing economy spooking Disney investors? UBS says the concerns are probably overdone. Yes, Disney's theme parks and resorts hit a rough spot during 2002 and 2003. But UBS thinks Disney is better prepared now for a U.S. economic downturn, especially given increased business overseas. Citigroup disagrees. It cut Disney to a Hold from a Buy, saying its research shows Disney will likely be hit by lower park attendance and weaker advertising.
WRITERS' STRIKE - How much has the writers' strike affected ongoing projects for both the movie and TV biz? Our media reporter Julia Boorstin says ABC has done much better than competitors On Monday, the Financial Times reported Disney CEO Bob Iger, along with News Corp CEO Peter Chernin, attended secret meetings with the WGA. Look for comments on delays (or lack thereof) for major movies and TV shows.
DISNEY OVERSOLD? - Disney was one of ten oversold stocks mentioned in a Barrons cover story on Jan. 26. Barrons says Disney's PE near a ten-year low. CNBC Contributor Vince Farrell says a world-class brand like Disney is cheap at current PE ratios. If Disney's earnings report reassures skittish investors, it's likely to get some off the fence and into Disney shares.
SAGE WORDS - ... on Disney from Julia Boorstin can be found in her blog this morning. She thinks the cable biz's performance will also be a key element to watch.
ESTIMATES:
Q1: EPS up 7% to $0.52, revenues up 3% to $10.044 billion
Q2: EPS up 13%% to $0.48, revenues up 4% to $8.387 billion
FY 08: EPS up 11% to $2.12, revenues up 4% to $37.037 billion
Year-ago actuals: Q4 EPS $0.49, Rev. $9.725 billion
Source: Thomson Financial
Factoids:
UP AND DOWN... MOSTLY DOWN - On Jan. 23, the day after Societe General sold the long positions of rogue-trader Jerome Kerviel, Disney dropped to an 11-month intraday low of $26.30. Since then Disney shares have bounced back more than 15%. However, Disney is still down about 14% from its $35.47 closing high on Oct. 12.
CRAMER LIKES IT - During Monday's Lightning Round on Mad Money, Jim Cramer said he's bullish on Disney.
