Yahoo Finance Elsa, Avengers send Disney soaring
Frozen is still hot for the Walt Disney Company (DIS).
Products tied to the smash animated movie starring the ice queen, Elsa, plus the new Avengers: Age of Ultron helping the entertainment company post a $2.1 billion profit in its fiscal second quarter. Sales of consumer products such as Frozen dolls jumping 10%...while media networks, including ABC and ESPN, showing a whopping increase of 13%.
“Our second quarter performance, marked by increased revenue, net income and EPS of $1.23, demonstrates the incredible ability of our strong brands and quality content to drive results,” Chairman and Chief Executive of Disney Bog Iger said in a statement.
Yahoo Finance’s Aaron Task is impressed.
“This was a blowout quarter for a company that continues to hit the ball out of the park,” “It’s hard to find much of a flaw with Disney other than the fact that the stock has done so well maybe it’s too crowded a trade right now.”
Disney shares are up more than 18% this year, based on Monday's close.
Get the Latest Market Data and News with the Yahoo Finance App
Task also notes Disney made no mention of what many other multi-national companies have reported this quarter about why their earnings weren’t as good as hoped.
“I didn’t hear anything from Disney about how the strong dollar hurt us,” he points out. “They beat on earnings by $0.12, they beat on revenue by about $200 million in terms of expectations. And there aren’t that many companies this quarter that are beating on both the top and bottom line, and certainly not by that kind of margin.”
Task adds Disney’s money-making film business hasn’t skipped a beat…and looks to keep going strong.
’The Avengers: Age of Ultron had the second-biggest opening weekend ever, only after the first Avengers movie,” he explains. “You have the Star Wars movies coming up, there’s going to be a Frozen sequel, who knows what’s coming next from Pixar-- it is an incredible machine they have going right now at Disney in terms of their ability to crank out hits.”
Task also says we shouldn’t ignore the fact that Disney’s famous theme parks also saw a revenue gain of 6%.
“This quarter’s numbers got a big boost from the parks,” he points out. “We forget how big a business that is, too.”
Task notes Disney is really bucking the trend in corporate America to get leaner and meaner.
“Right now on Wall Street there’s this push to break up companies and the conglomerate model is out of fashion,” he says. “This is a conglomerate with many moving parts that all seem to be working.”
Task gives a lot of credit to Disney’s CEO for that.
“You have to tip your hat to Bob Iger and the team there for what they’ve done at Disney,” he argues. “Will there be threats in the future? Absolutely. Can they keep this momentum going? That’s the question. But right now it’s hard to find any kinks in the Disney armor.”
Task adds that among the potential risks to the company-- efforts by cable companies to appeal to “cord cutters” who want to limit what they pay for.
“I think it’s a long-term threat,” he says. “And that is why Disney is suing Verizon (VZ) saying they are in breach of contract by offering these skinny bundles where the sports package is an option instead of coming with basic cable.”
