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The Walt Disney Company
DIS -0.64%
is expected to announce fourth-quarter results after market close on Thursday. Here's what you need to know.
Disney's cable segment has underperformed over the past three years, thanks to the increasing number of cable cuts among viewers. Now the House of the Mouse is building ammunition to join the wars that are going on continuously; It launched the ESPN + consumer direct-to-air service in April and is preparing to launch a dedicated Disney broadcast service by the end of 2019.
Disney has also finalized an agreement to acquire 21st Century Fox.
FOXA, -0.08%
entertainment assets, including the famous Twentieth Century Fox TV and movie studios, cable networks including FX and National Geographic Channel, Star India and Fox's participation in Hulu. The transaction was initially valued at $ 71 billion and included Fox's 39% stake in Sky PLC. But Fox agreed in September to sell this stake to Comcast Corp.
CMCSA, + 0.44%
after losing a fierce bidding war for majority control of Sky. Now the deal will cost Disney considerably less.
Lily: European Commission approves Disney-Fox agreement – with conditions
Also: 21st Century Fox's Cable Revenue Growth Lags
On Thursday, investors will look for more details on Disney's plans for Fox's new assets. General Manager Bob Iger made some hints during Disney's third-quarter earnings call, including that Fox's tag, Searchlight, would likely produce an original film and television for the streaming service. Disney. And in October, Iger announced that several senior executives of Fox TV would be transferred to Disney's television division.
The company's distribution strategy will be the focus of investors' concerns. Investors will be looking for an update on ESPN + subscription growth, as well as additional details on Disney's upcoming direct-to-consumer service.
Then there is the question of Hulu. The streaming service was formerly a joint venture with Fox, Disney, Comcast and AT & T, with the companies holding 30%, 30%, 30% and 10% respectively. But with the Fox deal, Disney will end up with a 60% stake. What role will Hulu play in the new Disney universe, especially given his plans to launch a streaming service? And will the company attempt to buy the remaining interest in Comcast and AT & T?
In terms of earnings, here's what to expect:
EarningsAnalysts surveyed by FactSet expect Disney to report a profit of $ 1.34 per share, an increase of 25% over the fourth quarter of 2017.
Estimize, which relies on estimates provided by analysts on the buy and sell sides, fund managers, academics and others, expects a EPS of $ 1.35.
ReturnedAnalysts surveyed by FactSet expect a turnover of $ 13.73 billion, of which $ 5.7 billion from media networks and $ 5.08 billion from the parks and resorts segment. Disney's consumer and interactive media division is expected to generate revenues of $ 1.16 billion, while the studio division is expected to generate revenues of $ 1.78 billion. Estimate the total income of pickets at $ 13.9 billion.
Disney's revenues reached $ 15.2 billion in the fourth quarter of 2017.
Stock movement: Disney shares were trading at $ 115.60 a share on Wednesday morning and have gained 7.5% since the beginning of the year. The S & P 500
SPX, + 1.24%
has gained 3.8% since the beginning of the year and Dow Jones Industrial Average index
DJIA, + 0.98%
which counts Disney as a member, has gained 4.8%.
Of the 24 FactSet analysts who cover Disney, 13 attributed the purchase or equivalent to the stock, 10 considered it neutral, and 1 rated it underweight or sold. The average target share price is $ 121.99, about 5.5% higher than current levels.
Look to the front: The consensus regarding the fourth-quarter sales figure stands at $ 15.68 billion, while earnings per share is expected to reach $ 1.84.
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