By Ethan Smith
Walt Disney Co. (DIS) is scheduled to announce its fiscal fourth
quarter earnings after the market closes Thursday. Here's what you
need to know:
EARNINGS FORECAST: Net income of 88 cents a share is the
consensus of analysts surveyed by Thomson Reuters, compared with 77
cents reported a year earlier. The company doesn't provide earnings
guidance.
REVENUE FORECAST: Analysts expect revenue of $12.37 billion,
compared with $11.57 billion reported a year earlier.
WHAT TO WATCH:
--ESPN AFFILIATE FEES: Sports broadcaster ESPN provided a rare
sour note in otherwise strong earnings for Disney last quarter due
to issues including skyrocketing sports rights costs and modest
subscriber losses. But the most surprising blow was growth of
affiliate revenue -- the money paid by cable and satellite
companies to carry the channel -- in the mid-single digit
percentages, below the recent norm. Disney has said that should
return to its typical high-single digit rate and investors are sure
to be watching to make sure that is true.
--LIFE AFTER "FROZEN": Disney's film studio -- and, to a lesser
extent, its consumer-products division -- has soared the past two
quarters thanks to the blockbuster box office and DVD/digital sales
of "Frozen." But now that the animated hit is out of theaters and
has sold most of the copies that it will for viewing, the studio
must come back to Earth. Which isn't to say the summer wasn't
strong for Disney's studio, thanks to the hits "Maleficent" and
"Guardians of the Galaxy" -- particularly compared with a summer
2013 dominated by flop "The Lone Ranger."
--SHANGHAI AND "STAR WARS": A lot of the value baked into Disney
these days is based on huge expectations for upcoming "Star Wars"
films (and all the consumer products that will come with them) and
the company's first-ever theme park in mainland China. As the
planned late 2015 launch date for both Shanghai Disneyland and
"Star Wars: Episode VII" approaches, investors will be looking for
more details about them.
Write to Ethan Smith at ethan.smith@wsj.com
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