Recent box office hit Man of Steel was a blockbuster movie that surpassed the $600 million mark. Only 80 films have been able to achieve such a milestone. You can benefit from the success of big-screen films in the future by investing in entertainment stocks with great potential to give higher returns from investment.
The producer of Man of Steel
Time Warner Inc (NYSE:TWX) is the company behind several blockbuster films including The Dark Knight, The Harry Potter series, The Hobbit, and Pacific Rim, among others. For the second quarter of 2013, the company reported solid performance. Revenue and earnings were up, partly fueled by its recent blockbuster movies, Man of Steel and The Great Gatsby.
Growth was also driven by increased earnings from cable TV advertising, which grew 11%. The company’s net earnings jumped to $771 million, up 87% from $412 million a year ago. Consequently, Time Warner Inc (NYSE:TWX) raised its earnings projections for this year.
Time Warner Inc (NYSE:TWX) still has several films scheduled for release this year and in the ensuing years. Its upcoming films include the two sequels to The Hobbit, scheduled for release in December 2013 and December 2014, respectively; The Lego Movie, to be released in February 2014; 300: Rise of the Empire in March 2014; Godzilla in May 2014; Man of Steel 2 in 2015; The Flash in 2016; and Justice League in 2017.
Future growth will also be fueled by TV advertising from its cable television segment that airs popular channels like CNN and TNT. Revenue from this segment will normally increase during annual sports events like the NBA playoffs. For this year, Time Warner Inc (NYSE:TWX) shares have performed well, gaining 50% year to date.
The name adored by kids
When you talk movies with your kids, The Walt Disney Company (NYSE:DIS), pioneer of big-screen animated films, is bound to come up.
What sets The Walt Disney Company (NYSE:DIS) apart from the rest is its fully diversified structure, which goes beyond movie production. It has five main business segments that include parks and resorts, studio entertainment, consumer products, media networks, and interactive media. This gives the company better stability since it is not fully dependent on the success of its films. Nonetheless, movie production is important, and a major dent in this segment will significantly affect the overall business.
Recently, The Walt Disney Company (NYSE:DIS) suffered a major loss from its movie, The Lone Ranger, that will lead to a writedown of about $190 million. As a result, the studio entertainment division struggled with declining earnings. But this was offset by profits in other segments, particularly the media networks and the resorts and parks.
The Walt Disney Company (NYSE:DIS) is a very attractive long-term investment. For this year, shares of The Walt Disney Company (NYSE:DIS) already gained 25% year-to-date.The upbeat momentum will be sustained by earnings from different segments.