1119 Friday 9 November 2018

Last night Disney released their forth quarter results and as impressive as the figures were, analysts are more excited about what 2019 will bring.

Disney reported that both earnings and revenues for the company smashed expectations and the studio business romped to a 50% revenue growth YoY. EPS was expected to come in at $1.32, but Disney reported $1.48 and the $14bn revenue beat the $13bn estimations from Wall St.

Here is a breakdown of performance:

·         Media and networks: $5.96bn vs. $5.7bn forecast

·         Parks and resorts: $5.07bn vs. $5.08bn forecast

·         Studio: $2.15bn vs. $1.78bn forecast

·         Consumer and interactive: $1.12bn vs. $1.16bn forecast

One of the key factors to the growth and performance for Disney was the successes of movies such as Black Panther; Star Wars VIII; The Avengers and The Incredibles 2. The report also included the performance for Disney’s first venture into live sports streaming via the ESPN+ which has performed well in terms of new subscribers despite a drop in advertising.

Whilst the results were impressive, most were intrigued to see what the future had in store, and that didn’t disappoint either. In fact, it had analysts and comic book fans drooling! Firstly, the deal to buy Fox’s media assets looks likely to be completed in the near future following regulatory approval. Not only does this add a copious amount of move superheroes and other TV and film assets under the umbrella, but it will also add local TV, sports channels and HULU to the portfolio. In relation to HULU, one of the first moves Disney will make it to offer its services globally having previously only being viewed by a US audience.

But the biggest takeaway for the earnings call was the announcement of Disney+. The new streaming platform will launch in Q3/4 next year and is already being touted as a Netflix killer. With an array of movies and TV programming already in their arsenal, plus the addition of the Fox assets, Disney pulled out all the stops by announcing the production of new content including a live action Star Wars series and a slew new Marvel shows following the characters of the movie franchise.

Disney and its investors have had a volatile past couple of months with plenty of peaks and troughs along the way, but the year to date performance currently stands at a 7.9% gain and the stock is currently up 2.56% in pre-market trading.

Anyone already holding a position in Disney will have perked up on the 2019 outlook and there is no doubt that it will have whet the appetite anyone that doesn’t.

To get further analysis on Disney, Netflix and media in general, please contact one of our brokers on 0121 454 0770.

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