Disney Stock Guardians Of The Galaxy Star Lord Milano

Guardians of the Galaxy soared to the top of the 2014 box office charts in Disney's Q4. Credit: Marvel Entertainment.

Shares of Disney (NYSE:DIS) stock fell 2% Friday after the House of Mouse failed to handily beat analyst estimates in reporting fiscal fourth quarter earnings. Sound unfair? Of course it is, but that's the cost of beating the consensus by at least $0.10 a share in each of the past three quarters.

Investors were expecting another home run. Instead, thanks in large part to the box office performance of Guardians of the Galaxy, they got a solid double to the gap in right center.

Space pirates beat aliens, monsters, lawmen ... evil witches, too!
You might even say Marvel made Disney's quarter. Studio Entertainment outperformed all other segments in fiscal Q4. Revenue jumped 18% while segment operating profit doubled to $254 million.

"Higher worldwide theatrical distribution results were due to the success of Guardians of the Galaxy and Maleficent in the current quarter compared to Monsters University and The Lone Ranger in the prior-year quarter," the company said in its earnings release.

How big a difference are we talking? A better-than-50% gain in worldwide grosses, it turns out, with Guardians of the Galaxy accounting for most of the difference. (Both Guardians and The Lone Ranger opened in the late summer.)

Movie
2013
( Domestic / Worldwide)
2014
(Domestic / Worldwide)

Monsters University

$268.5 mil. / $743.6 mil.

 $0 / $0

The Lone Ranger

$89.3 mil. / $260.5 mil.

 $0 / $0

Maleficent

 $0 / $0

$241.2 mil. / $757.6 mil.

Guardians of the Galaxy

$0 / $0 

$329.6 mil. / $765.3 mil.

TOTALS

$357.8 mil. / $1,004.1 mil.

$570.8 mil. / $1,522.9 mil.

Source: BoxOfficeMojo.com.

We can expect more gains heading in fiscal Q1, when Disney begins reaping the benefits of home video sales of Guardians of the Galaxy. Digital copies of Marvel's space epic go on sale Nov. 18, with DVD, Blu-ray, and video-on-demand rental scheduled for Dec. 9.

Who says Spidey isn't helping Disney?
Yet the Marvel tailwind doesn't stop there. Spider-Man joined Frozen's Anna and Elsa as key imprints for boosting Consumer Products sales in fiscal Q4. The mix led to a year-over-year expansion in segment operating margins, continuing a long-term trend that dates back to the early days of the Marvel acquisition:

Disney Consumer Products
Segment Revenue
Segment Operating Income
Margin %

Q4 fiscal 2013

$,1004 million

$347 million

34.6%

Q1 fiscal 2014

$1,126 million

$430 million

38.2%

Q2 fiscal 2014

$885 million

$274 million

30.9%

Q3 fiscal 2014

$902 million

$273 million

30.3%

Q4 fiscal 2014

$1,072 million

$379 million

35.4%

Sources: S&P Capital IQ, Disney press releases.

Subtext is important here. In late summer 2011, Disney agreed to forfeit its claim on box office revenue from Sony's (NYSE: SNE) future Spider-Man movies in exchange for complete control of merchandising rights to the character. Thus, without a revenue-sharing deal in place, proceeds from sales of toys, T-shirts, and more related to The Amazing Spider-Man 2 went straight to Disney.

Phase

Marvel Studios chief Kevin Feige introducing the nine (!) movies of Phase 3 of the Marvel Cinematic Universe. Adding in Avengers: Age of Ultron and Ant Man and makes 11 movies scheduled for the next five years. Credit: Marvel Entertainment.

More Marvel magic on the way?
Looking ahead, it's important to note that Disney also announced the title for its newest entry in the Star Wars franchise. Star Wars: Episode VII: The Force Awakens could set records when it hits theaters in December 2015. But it's also just one catalyst of many, most of which are coming from Marvel.

Another 11 epics in all scheduled for the next five years, to be specific. An intergalactic tale that kicked off in Marvel's The Avengers and continued in Guardians of the Galaxy, and which -- if history is a reliable guide -- should produce at least another $7 billion in worldwide grosses. A remarkable achievement for any studio, even one that's known for making magic.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google (A and C class), Netflix, and Walt Disney at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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