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Disney (DIS) to Report Q4 Earnings: What's in the Cards?
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Media giant – The Walt Disney Company (DIS - Free Report) – is slated to report fourth-quarter fiscal 2016 results after the closing bell on Nov 10, 2016. In the previous quarter, the company had registered a positive earnings surprise of 0.6%. Moreover, the company has surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average earnings surprise of 3.4%. Let’s see how things are shaping up prior to this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Disney is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Disney Earnings ESP is -0.87% as the Most Accurate estimate stands at $1.14, whereas the Zacks Consensus Estimate is pegged higher at $1.15. So, although Disney carries a Zacks Rank #3, a negative ESP makes an earnings beat unlikely. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Factors Influencing this Quarter
Disney’s movie business and Parks & Resorts division have impressed investors in the previous quarters. However, the company may face tough comparison in case of its movie business as the fiscal fourth quarter is generally a weaker quarter for the company. At the end of the third quarter and in fourth-quarter fiscal 2016, the movies released by the company were Pete's Dragon, The BFG, Queen of Katwe and The Light Between Oceans. Among all these movies, The BFG has been the top performer with worldwide collection of more than $242 million. However, the performance of these movies was not on par if we compare with the box office performance of movies like Inside Out and Ant-Man, which were released in fourth-quarter fiscal 2015. Inside Out collected more than $850 million worldwide.
On the other hand, the Parks & Resorts division is anticipated to report robust financial numbers, and may drive the company’s bottom line. Disney is focused on deploying its capital toward the expansion of the Parks and Resorts business, thereby increasing its market share and creating long-term growth opportunities.
The major concern for Disney is the performance of ESPN. For some time now, declining subscriber count and higher programming costs have been a cause of concern for investors. Disney’s primary cash cow – ESPN – has been under immense pressure as the Pay-TV landscape continues to change owing to the migration of subscribers to online TV. Falling subscriptions will have a telling effect on the network’s ad revenues.
With its huge international presence, Disney remains prone to unfavorable foreign currency translations, which may have an adverse effect on its top- and bottom-line results.
QVC Group currently has an Earnings ESP of +6.90% and a Zacks Rank #3.
Nordstrom Inc. (JWN - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank #3.
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Disney (DIS) to Report Q4 Earnings: What's in the Cards?
Media giant – The Walt Disney Company (DIS - Free Report) – is slated to report fourth-quarter fiscal 2016 results after the closing bell on Nov 10, 2016. In the previous quarter, the company had registered a positive earnings surprise of 0.6%. Moreover, the company has surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average earnings surprise of 3.4%. Let’s see how things are shaping up prior to this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Disney is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Disney Earnings ESP is -0.87% as the Most Accurate estimate stands at $1.14, whereas the Zacks Consensus Estimate is pegged higher at $1.15. So, although Disney carries a Zacks Rank #3, a negative ESP makes an earnings beat unlikely. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Factors Influencing this Quarter
Disney’s movie business and Parks & Resorts division have impressed investors in the previous quarters. However, the company may face tough comparison in case of its movie business as the fiscal fourth quarter is generally a weaker quarter for the company. At the end of the third quarter and in fourth-quarter fiscal 2016, the movies released by the company were Pete's Dragon, The BFG, Queen of Katwe and The Light Between Oceans. Among all these movies, The BFG has been the top performer with worldwide collection of more than $242 million. However, the performance of these movies was not on par if we compare with the box office performance of movies like Inside Out and Ant-Man, which were released in fourth-quarter fiscal 2015. Inside Out collected more than $850 million worldwide.
On the other hand, the Parks & Resorts division is anticipated to report robust financial numbers, and may drive the company’s bottom line. Disney is focused on deploying its capital toward the expansion of the Parks and Resorts business, thereby increasing its market share and creating long-term growth opportunities.
The major concern for Disney is the performance of ESPN. For some time now, declining subscriber count and higher programming costs have been a cause of concern for investors. Disney’s primary cash cow – ESPN – has been under immense pressure as the Pay-TV landscape continues to change owing to the migration of subscribers to online TV. Falling subscriptions will have a telling effect on the network’s ad revenues.
With its huge international presence, Disney remains prone to unfavorable foreign currency translations, which may have an adverse effect on its top- and bottom-line results.
DISNEY WALT Price, Consensus and EPS Surprise
DISNEY WALT Price, Consensus and EPS Surprise | DISNEY WALT Quote
Other Stocks Poised to Beat on Earnings
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Dick's Sporting Goods Inc. (DKS - Free Report) currently has an Earnings ESP of +2.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here
QVC Group currently has an Earnings ESP of +6.90% and a Zacks Rank #3.
Nordstrom Inc. (JWN - Free Report) currently has an Earnings ESP of +1.89% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>