Two major Dow Jones Industrial Average (INDEX: ^DJI ) components report earnings this week as the season winds to a close: the world's largest entertainment company, Disney (NYSE: DIS ) , and the networking giant Cisco (Nasdaq: CSCO ) . Both companies have seen their share prices climb this year, but Disney has stolen the show recently. Shareholders will be looking for signs that each company can maintain its momentum for the rest of 2012.
Fresh off a record-shattering opening for its newest film, The Avengers, Disney will take the first swing tomorrow afternoon. According to early estimates, The Avengers generated $200.3 million in ticket sales, making it the highest-grossing domestic opening of all time. Investors will be hoping for a similar blockbuster during the earnings conference call on Tuesday morning.
As of now, analysts are expecting earnings of $0.55 per share on $9.56 billion in revenue for the second quarter. Don't let the numbers distract you from the key plot points, however. Disney's recent film, John Carter, was an expensive, abysmal failure. The studio expected to lose $80 million to $120 million due to a writedown related to the film. Investors will get a better picture of the effect on the bottom line and find out whether the historic debut for The Avengers can more than offset the John Carter debacle.
While recent films could provide context for the summer film season, investors also need to watch for theme park trends. Attendance and theme park spending has been strong thus far, perhaps due to the unseasonably warm weather throughout much of the country.
Cisco heads into Wednesday's earnings call with slightly less enthusiasm than Disney, primarily because the networking giant's shares fell 4.3% last week. This was the third-largest drop of the 30 Dow components, almost as severe as the 5.9% fall experienced by Caterpillar (NYSE: CAT ) and the 6.3% decline for Bank of America (NYSE: BAC ) . The shares of those two companies, which are largely tied to broader economic trends, were hurt by a mediocre jobs report on Friday. Cisco, on the other hand, is less closely correlated with the economic cycles, but is still dependent on business spending and government contracts.
Analysts are expecting $0.41 per share from Cisco, which would be up 10.8% from a year ago. On the top line, analysts are expecting revenue of $11.58 billion, reflecting 6.6% growth from the same quarter last year. Cisco continues to pursue growth through tack-on acquisitions, but also sees opportunities in the new era of cloud computing.
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