404 pm: Disney closed the day at 81.03 down .19. Earnings should be released in about 10 minutes. The street is expecting .96 earnings per share. Will Disney beat the street?
416 pm: Disney Revenues of $11.65B compared to $11.25B estimate. Earnings per share of $1.11 compared to $.96 estimate.
419 pm: Disney Studios profit quadrupled to $475 million. This is on the strength of Frozen.
423 pm: Disney has released their earnings press release. Here is the preamble.
The Walt Disney Company today reported record earnings for the second quarter. Diluted earnings per share (EPS) for the second quarter increased 30% to $1.08 from $0.83 in the prior-year quarter. Excluding certain items affecting comparability, EPS for the quarter increased 41% to $1.11 from $0.79 in the prior-year quarter. Diluted EPS for the six months ended March 29, 2014 was $2.11 compared to $1.60 in the prior-year period. Excluding certain items affecting comparability, EPS for the six months increased 36% to $2.15.
“We’re extremely pleased with our results this quarter, delivering double-digit increases in operating income across all of our businesses and the highest quarterly earnings per share in the history of the Company,” said Robert A. Iger, Chairman and CEO, The Walt Disney Company. “Our continued strong performance reflects the strength of our brands, the quality of our content, and our unique ability to leverage creative success across the entire Company to drive value.”
426 pm: Bob Iger to appear on CNBC’s Squawk on the Street tomorrow morning at 10am ET to discuss today’s earnings announcment.
428 pm: Disney Interactive remains profitable due to continued success of Disney Infinity, which was released in the fourth quarter of the prior year, and growth at their Japan mobile business. It will be interesting to see if the division can remain profitable until Disney Infinity 2.0 is released.
433 pm: Captail spending on domestic parks is slightly lower compared to last year. It is presumed that a lot of this cost when into development and rollout of MyMagic+. Internationally, shot up from 359 to 651 million due to constructions costs at Shanghai Disney Resort.
450 pm: With Disney at record-breaking profit level, expect questions on what they will do with the money they are making. Reinvestment in existing businesses? Acquisitions? Higher Dividends? Share repurchase? Expect a mixture of all of these.
454 pm: The music being played as we wait for the earnings conference call is very ominous. Doesn’t reflect their positive earnings report.
500 pm: The call begins right on time.
501 pm: Bob begins the call by discussing how happy they are with their earnings, which are record breaking. He reminds us the Frozen is headed to Broadway.
503 pm: Bob said that Marvel has success with releasing Marvel films the first weekend in May. He says Avengers: Age of Ultron and Captain America 3 will be released that weekend. Warner Bros currently has scheduled their Man of Steel sequel the same weekend as Cap 3.
505 pm: Bob is now addressing Maker Studios stating they are excited to enter the short-form video space with their brands and franchises.
510 pm: Jay Rasulo said that increased spending at the parks was partially offset by the cost of MyMagic+ 3/4 of Resort Guests are using MyMagic+ preplanning tools. More than 25% of Day Guests are preplanning with MyMagic+ FastPass+ usage is up 40% compared to legacy FASTPASS. Disney believes these metrics show that MyMagic+ is improving guest satisfaction.
514 pm: Disney Interactive has three straight quarters of profitability. This is a first.
515 pm: Question time… First question is about the impact Frozen had on consumer products. 9 out of 10 top selling items at Disney Store were Frozen products. Interestingly, it was not among the top 3 franchises among their licensed business. Bob said they consider it one of their top 5 franchises and expect it to remain hot over the next 5 years.
518 pm: The next question is about the financials at the parks. Jay does not expect any major costs to be associated with the opening of the Seven Dwarfs Mine Train. MyMagic+ spending is expected to trail off.
521 pm: An analyst is asking about their franchise driven film strategy. Bob says the strategy is working and that they are just beginning to see the impact on the company. Bob says the goal with Guardians of the Galaxy is to have another Avengers by having a second group of heroes. Bob also says that they expect to make 3 Star Wars saga films and 3 spinoff films to start.
528 pm: The next question is asking why they acquired Maker Studios. Bob sees Maker as a distribution platform. He feels Disney did not have the ability to distribute and sell ads effectively as Maker can. He listed Star Wars and Marvel as franchises that Maker Studios will now have access to.
532 pm: An analyst then asked about programming cost growth at cable networks. MLB, NFL, and World Cup will all increase programming costs due to higher rights fees.
536 pm: A question about ABC ratings. Disney looks at non-sports programing ratings, which they are down in the single digits for the year. They have just received the new pilots and hope to air better programming next year. ABC tries to air programming that they own which is more profitable for them.
542 pm: The next question is about a slow down in ad spending. He said the Winter Olympics had a bigger impact than they expected. Also the NBA Playoff match ups were less than favorable with the Lakers, Knicks, and Celtics not in the hunt.
549 pm: Proving the analyst doesn’t know what he is talking about… he mentions that Hong Kong opened 4 or 5 years ago. An interesting note, Shanghai Disney Resort will sell date-specific tickets so they can forecast demand.
553 pm: The last question is about Dish Network’s new distribution platform. Disney is not overly invested in it, but hopes it succeeds.
554 pm: Bonus questions! Analyst asks about what impact they see when Comcast or others invest in their parks. Bob says that it brings folks to their gates as well.
555 pm: The call is over. I envision that Bob and Jay are running out the door to get to the premiere of Million Dollar Arm in Hollywood.