Disney's Star Turn - Motley Fool 8/9/06

[cellarhound]

Disney's Star Turn
Motley Fool - 8/9/06

Disney's Star Turn

You've got to hand it to Disney CEO Bob Iger. He keeps impressing investors. Wednesday morning, the family entertainment company blew past analyst profit targets for its third quarter on refreshingly wider margins.

Earnings rose 36% to $0.53 a share, with revenues inching up by 12% to hit $8.6 billion. Wall Street nailed the top-line production but was expecting profits to only grow to $0.44 a share. This isn't the first time that Disney has made mincemeat out of analyst estimates since Iger took over. Over the past year, Disney has trounced quarterly profit targets by at least a nickel a share. No, you can't blame all of the success on Iger's transition to power. This hasn't been a radical makeover at the top like we're seeing with CEO Mark Hurd over at Hewlett-Packard. Still, it's hard to argue with success or pass on the chance to rub Iger's rabbit's foot and admire his perfect timing.

Digging deeper into the numbers, you find a company that improved in all four of its business segments. More than half of the 32% increase in operating profits for the quarter can be attributed to the turnaround in the studio entertainment segment. Those Chronicles of Narnia DVDs have been selling like hotcakes, and the future looks pretty good now that Pirates of the Caribbean: Dead Man's Chest and Cars are the two top-grossing movies of the year.

Full Story - Disney's Star Turn

[nish221]

Yup, kind-a- expected that, but Bob really has changed the tenure of investor
relations at Disney.

BTW. Cellerhound, a big thanks to you and all MC News crew for a great
job!

[cellarhound]

Well, we have seen a rash of analysts downgrading the stock from buy to hold, and from Out-perform to Peer-perform positions... Right not they are eating a little crow...

[nish221]

Yes. I could see the analysts thinking: "Well, they did great in everything! but
they can't match/beat that next year!"

But for this quarter (and most likely the near 6 month), I think these
analysts aren't looking at the residual affects from the past year:
* I don't see Parks really losing that much steam after the 50th.
* the Cars toys and the DVDs (Cars/Pirates) should be gangbusters this Fall/Winter. * ABC should be able to continue for a while w/ Lost & Desparate Housewives.
* Finally, the unexpected "afterglow" from HSM still hasn't played out yet (although I think it will in the next six months IMHO).

[cellarhound]

Originally Posted by nish221

Yes. I could see the analysts thinking: "Well, they did great in everything! but
they can't match/beat that next year!"

But for this quarter (and most likely the near 6 month), I think these
analysts aren't looking at the residual affects from the past year:
* I don't see Parks really losing that much steam after the 50th.
* the Cars toys and the DVDs (Cars/Pirates) should be gangbusters this Fall/Winter. * ABC should be able to continue for a while w/ Lost & Desparate Housewives.
* Finally, the unexpected "afterglow" from HSM still hasn't played out yet (although I think it will in the next six months IMHO).

Actually, I did read analysis that Iger expects Parks and Resorts to mirror last years returns for the current quarter... Which may be one reason why they increased the price... It is going to be interesting to watch...