Walt Disney (DIS 0.84%) is rolling these days. The stock hit yet another all-time high on Friday, and that's going to raise the bar in terms of what the market expects when the family entertainment giant reports quarterly results on Tuesday afternoon.
Analysts are holding out for modest growth during the period. They see revenue climbing 6% since the prior year's fiscal third quarter to hit $13.22 billion. Wall Street pros see a bigger year-over-year move on the bottom line with earnings per share rising 11% to $1.42.
That 6% in top-line growth may not seem very exciting, especially since so much seems to be going right at the House of Mouse. The pace had been accelerating in recent years, going from 3.4% in fiscal 2012 to 6.5% in fiscal 2013 to 8.4% in fiscal 2014. Why are we seeing things decelerate this year, going from 7% year-over-year growth during the fiscal second quarter to a projected 6% in Tuesday's report?
Well, it's true that Disney's rocking on most fronts. It's the studio behind half of this year's six highest grossing movies, and in general multiplex terms 2015 is kicking the snot out of 2014. Disney World is posting record attendance. ESPN remains the undisputed sports network.
All of this may be true, but there are a few factors weighing on Tuesday's quarterly report. For starters, having hit movies in theaters this summer is great, but the real money doesn't start trickling in until after the multiplex run. This quarter will also be stacked up against the first full quarter of Frozen availability on Blu-ray and DVD. The game-changing animated feature hit the home entertainment market in mid-March of last year. It's also no secret that the shiniest arrow in Disney's quiver -- the new Star Wars movie -- won't hit the big screen until December. That's fiscal 2016 on Disney's financial calendar.
On the theme park front, it's important to remember the impact that Easter has on tourist-heavy businesses. Because the school break holiday sometimes falls in March and sometimes in April, it does bounce around from quarter to quarter. It was in April last year and March this year. This resulted in inflated theme park results during the March quarter this year, but it will go the other way during the June quarter this time around.
And, yes, ESPN is a beast, but it's also a business dealing with escalating contracts for programming content. Media networks was actually Disney's fastest-growing segment during this year's fiscal second quarter -- up 13% since the prior year -- but it also clocked in with a slightly lower operating profit.
None of this should give an investor pause heading into the report after Tuesday's market close. Disney has typically beaten Wall Street's expectations during Bob Iger's tenure as CEO. However, with the stock hitting new highs, it will be up to Disney to prove that it can do more than merely land a smidgen ahead of where the pros are parked. The stock's been sprinkled with pixie dust, and now the company itself will need to make sure that it keeps flying.