Earnings Cheat Sheet: What Happened to Disney’s Magic?

Which one of you leaked earnings?

Entertainment giant, Walt Disney Co. (DIS), had earnings released before closing bell on Thursday.  The release was unexpected, because Disney was scheduled to release earnings after closing bell.  The 16 minute early leak appeared to confuse and scare investors as shares traded down almost 3% immediately.

Disney is known world wide and owns media leaders such as Pixar, ESPN, and Marvel.  What could have caused the selling in Disney before closing bell?

Earnings: The company reported earnings of $835 million (43 cents per share) for the last quarter.  This was a decrease of 7% from last year’s $895 million in the same period.  Excluding items, Disney earned 45 cents per share.

Revenue: Decreased overall by 1%, $9.9 billion to $9.7 billion.  Parks and resorts revenue decreased 1%, and media network revenue decreased 7%.

Actual versus Wall Street Expectations: Earnings of 45 cents per share (excluding items) fell below expectations of 46 cents per share.  This was the first earnings miss from Disney all year.  Total revenue was also a miss for Disney, as analysts were expecting $9.95 billion.

Notable Stats: Pixar’s Toy Story 3 was a historic box office smash.  The movie opened at number 1 with $110 million, which marked the 11th straight movie from Pixar to open at the top spot.  Toy Story 3 was also the best selling Blu-ray in the first week of November.  The strong Blu-ray sales will be reflected in the next earnings release.

Did You Hear That? “The current trends in our business are encouraging. We’re also optimistic about our creative pipeline. Thus, we believe we are well positioned to deliver strong results in 2011,” said Disney CFO Jay Rasulo.  Upcoming future blockbusters include Tron and Cars 2.

Commentary: Disney is a well known entertainment company that has stood the test of time.  The company was founded in 1923 and has been entertaining kids and adults ever since.  Although shares closed down Thursday, after-market trading shows the stock recovering almost 2%.

Disclosure: No positions.