Walt Disney is gone, but The Walt Disney Company (NYSE: DIS) is going strong. Tuesday night is first-quarter earnings night at the House of Mouse. Pick up a postcard from Disney in 2010, courtesy of Fool Rick "Fairy Godfather" Munarriz, then come back here for a look into the less-distant future.
What Fools say:
Here's how Disney's CAPS scoring rates against some of its peers and competitors:
|
Market Cap (millions) |
Trailing P/E Ratio |
CAPS Rating | |
|---|---|---|---|
|
General Electric (NYSE: GE) |
$363,803 |
16.4 | |
|
News Corp. (NYSE: NWS-A) |
$60,332 |
18.5 | |
|
Disney |
$58,032 |
13.7 | |
|
CBS (NYSE: CBS) |
$17,434 |
14.7 | |
|
Marvel Entertainment (NYSE: MVL) |
$2,221 |
19.3 |
Our CAPS players have an astonishing range of positive things to say about Disney:
- "The stock has to bottom out soon, trading at only 12 times trailing earnings" at the time.
- "When the writers' strike ends, so does Disney's discount."
- "Solid company with diverse operations."
- "A weak dollar benefits this international superstar."
- And my personal favorite, "[Apple (Nasdaq: AAPL) CEO] Steve Jobs is near it."
It's hard to find Negative Nellies, with only four dour comments in the past three months. The domestic economy gets the blame for Mickey's misfortunes, and a fellow official Fool thinks that the rise of user-created entertainment content will be the end of slow-footed media mastodons like Disney.
What management does:
Profit margins have been on an expansion spree since the end of 2005, which just happens to coincide with the Bob Iger era.
|
7/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 | |
|---|---|---|---|---|---|---|
|
Operating |
14.1% |
15.9% |
17.2% |
18.1% |
18.6% |
19.1% |
|
Net |
9.0% |
10.0% |
12.3% |
12.9% |
12.8% |
13.2% |
|
FCF/Revenue |
10.9% |
14.0% |
13.2% |
14.9% |
13.3% |
10.9% |
|
Y-O-Y Growth |
7/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
|---|---|---|---|---|---|---|
|
Revenue |
3.4% |
7.6% |
9.4% |
9.8% |
9.0% |
5.2% |
|
Earnings |
10.4% |
34.3% |
65.9% |
70.2% |
57.2% |
41.5% |
One Fool says:
If you think that a U.S. downturn brings bad news for this company, you should read a book and try again. It's a global brand that draws in more and more big-spending tourists as the dollar weakens, making up for the loss of reticent, penny-pinching American customers.
A bigger storm cloud on Disney's horizon is shaped like a drawn-out writers' strike. Without a steady stream of fresh feature movies, Disney's long-term prospects dry up. Take away Desperate Housewives and Lost, and there goes a good chunk of the near-term income. Rumor has it that a deal is in the works, but we've seen the negotiations fall apart many times before.
But the strike hasn't affected the ABC network much so far, and certainly not in the December quarter we're mulling over here. The company has beaten its year-ago earnings like clockwork, every quarter since the second quarter of 2003, and I'd expect no less this time.
But it's time to get your writers back if you want to keep that streak alive, Bob.
