Movies, entertainment and theme park company Walt Disney (DIS) reported earnings per share of $1.48, versus the $1.34 estimate, in Q4 2018, observes value investor John Buckingham, editor of The Prudent Speculator.
The company had total revenue of $14.3 billion, versus the $13.7 billion estimate. The shares rose following the announcement, with shareholders and analysts enthused about the new Disney+ streaming service.
CEO Bob Iger said, “Our Disney-branded service, which we’re officially calling Disney+, will be in the U.S. market late next year, offering a rich array of original Disney, Pixar, Marvel, Star Wars and National Geographic content, along with unprecedented access to our incredible library of film and television content, including all of our new theatrical releases starting with the 2019 slate.”
CFO Christine McCarthy said of the upcoming quarters, “We are extremely enthusiastic about our 2019 slate, which include Ralph Breaks the Internet, Mary Poppins Returns, Captain Marvel, Dumbo, the next Avengers films, Aladdin, Toy Story 4 and The Lion King. I’ll remind you that 2018 was the best year in our studio’s history.”
We are pleased that Disney won the battle for the 21st Century Fox assets, and we think the acquisition strengthens an already best-in-class content portfolio. DIS should enjoy increased production and marketing scale, and the Disney+ subscription should be a content delivery method with significant potential.
In addition, the Disney film studios have been able to churn out plenty of winners that have dwarfed the inevitable losers, and we see no change in that success formula anytime soon. DIS shares yield 1.4%. Our Target Price has been bumped up to $151.
