The Walt Disney Company (DIS): Mickey’s Media Empire

Page 1 of 2

The Walt Disney Company (NYSE:DIS)When my fellow investors ask me what my favorite long-term holding is, I never hesitate to tell them that it’s The Walt Disney Company (NYSE:DIS). In my opinion, Disney is an exceptional stock hidden in plain view, with rock solid business segments that are able to weather severe economic downturns while flourishing in times of prosperity.

Nearly half of The Walt Disney Company (NYSE:DIS)’s revenue is generated by its media networks, such as ESPN, and another third is brought in by its incomparable theme parks. Meanwhile, it also owns exciting properties such as Pixar, Marvel and Lucasfilm, which make it the largest force in entertainment on this planet.

undefined

Solid second quarter growth

Therefore, it came as no surprise when The Walt Disney Company (NYSE:DIS) soundly beat Wall Street estimates with robust second quarter earnings. Disney’s net income rose 32% year-on-year to $1.5 billion during the second quarter. On a per share basis, Disney earned $0.83 per share, beating the analyst estimate by six cents. Revenue rose 10% to $10.6 billion, also topping the $10.5 billion that analysts had been expecting.

Mickey’s media empire

The Walt Disney Company (NYSE:DIS)’s media segment, which includes ESPN and ABC, reported a 6% gain in sales to nearly $5 billion. On this front, the company competes with other media behemoths such as Time Warner Inc (NYSE:TWX), CBS Corporation (NYSE:CBS), Viacom, Comcast Corporation (NASDAQ:CMCSA) and News Corp (NASDAQ:NWSA).

In this industry, Disney’s toughest competitor is Time Warner, which owns HBO, the Turner Networks (CNN, Cartoon Network, TNT, TBS), and the broadcast rights to NCAA games. However, Time Warner Inc (NYSE:TWX) fared far worse than Disney during its recently reported first quarter results, with flat revenue growth from the prior year quarter at $6.9 billion.

That $6.9 billion figure includes Time Warner’s film, television, and publishing segments. Although Time Warner Inc (NYSE:TWX) reported growth in its film and television businesses, losses in its ailing publishing segment offset those gains. This means that if Time Warner can’t find a way to start growing its top line again, The Walt Disney Company (NYSE:DIS)’s media segment could actually generate more sales than all of Time Warner combined.

Despite its impressive top line growth, Disney’s ABC network reported a decline in advertising revenue as a result of lower rated programs. However, CEO Bob Iger stated that he was “reasonably bullish” regarding advertising growth for the rest of fiscal 2013.

Mickey’s parks and resorts

Revenue at Disney’s parks and resorts, which now include its cruise lines, rose 14% to $3.3 billion. Disney operates theme parks in California, Florida, France, Japan and China. The company reported that higher guest spending and more hotel bookings, fueled by the launch of the Disney Fantasy cruise ship, contributed to its strong top line growth. Operating income at the segment also rose 72.5% to $383 million.

Looking ahead, Disney’s upcoming Shanghai Disney Resort, which will be three times the size of Hong Kong Disneyland, is expected to significantly increase revenue for its parks and resorts segment. Shanghai Disney is expected to open in December 2015.

Mickey’s movies

Disney’s Studio Entertainment division reported 13% revenue growth to $1.3 billion, thanks to the success of films such as Oz: The Great and Powerful and Wreck-it Ralph. Disney’s strong box office performance during the quarter shows that it has learned from past blunders such as Mars Needs Moms and John Carter. The studio division’s third quarter looks rosy as well, with Iron Man 3 having already grossed over $700 million worldwide within its first week.

The Walt Disney Company (NYSE:DIS)’s Studios easily outperformed Time Warner’s Warner Brothers film division, which reported a 4% decline in revenue to $2.7 billion last quarter. Warner Brothers’ offerings during the quarter, Gangster Squad and Jack and the Giant Slayer came in “below expectations,” according to Time Warner CEO Jeffrey Bewkes. In the current quarter, Warner Brothers is hoping that The Great Gatsby and The Hangover Part III can help it post some positive top line growth, but both films pale in comparison to Disney’s Iron Man 3 and Pixar’s upcoming Monsters University, the sequel to Monsters, Inc.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!