Lake Buena Vista, FL - August 6, 2019
By: William A Guerro Sr.
The House of the Mouse is scheduled to deliver its third-quarter fiscal earnings report before the market opening on Tuesday, August 6.
The entertainment company is going into the 3rd quarter fiscal reporting on a strong note: Its Disney Studios is turning out one Blockbuster after another. The company recently closed on the acquisition of Twenty-First Century Fox in late March and with a major new attraction, Star Wars Galaxy's Edge opening at Disney Land Park in California and a scheduled opening at Disney World on August 29, 2019. Disney is also in the final preparations to launch its broad direct-to-consumer streaming service, Disney+, in November.
Driven by investor excitement about the company's evolving business along with first and second quarter results that were likely better than most investors were expecting, shares have returned 29.2% in 2019 through Aug. 2. The S&P 500 has returned 18.3% over this period.
Here's what to watch and expect in Tuesday's report.
Disney Entertainments 3rd Quarter
During the fiscal third quarter, Disney released six movies: Penguins, Avengers: Endgame, Aladdin, and Toy Story 4 from its studios, and Tolkien and Dark Phoenix from the Fox studios. Marvel's latest Avengers film, which has shattered numerous major box office records, has raked in nearly $2.8 billion in theatrical receipts, as of Sunday morning. Aladdin and Pixar's Toy Story 4 have also performed very well, with ticket sales tallying just over $1 billion and about $959 million, respectively. Moreover, Captain Marvel, which was released just a few weeks before the start of the fiscal third quarter, should also contribute to the quarter's results.
This powerful lineup should compare favorably to the year-ago period's robust roster, comprised of Avengers: Infinity War and Pixar's The Incredibles 2. Of course, home entertainment's performance will also be a notable factor in the segment's overall results.
Disney Theme Parks continued Growth
There's no reason to believe that the parks, along with the experiences, and consumer products divisions won't continue to perform solidly, led by the theme parks and resort hotel businesses, Disney's domestic parks have come through quarter after quarter. Last quarter, visitors to domestic parks increased their average spending 4%, while attendance was up 1%.
Investors should also learn how the new Star Wars: Galaxy's Edge attraction at Disneyland, is affecting the park's performance. That huge attraction opened at the California park on May 31 and is scheduled to open at Disney World in Florida on Aug. 29.
In the first half of fiscal 2019, the parks, and consumer products segment's revenue grew 5% over fiscal 2018 and its operating income jumped 12%.