With Disney (NYSE:DIS) shares declining about 21% lower during the past three months, it may be a good time for investors to take a close look at the company and see if the stock offers an enticing entry point at these levels.
While a more diligent analysis of its financials is required to make an investment decision, a good starting place is a review of some of the key items important to management right now. To get some insight into management's thinking, here are four key quotes from Disney executives during the company's most recent quarterly earnings call.
More blockbuster movies ahead
Can Disney live up to the precedent set by its Star Wars debut? Disney CEO Bob Iger seems to think so.
[W]e've got an incredible pipeline ... of Pixar and Disney animated films, and Disney live action. We also know that those films drive a lot of business across Parks and Resorts and Consumer Products. So I would say that the Studio will continue to provide more growth opportunities for the company, and that includes growth internationally...
Star Wars played a key role in the company's outstanding fourth-quarter performance in its studio entertainment segment. Operating income in the segment jumped 86% from the year-ago quarter, driven primarily by Star Wars, according to management.
Management's confidence in its studio pipeline is both comforting and promising.
ESPN is outperforming peers
Disney's ESPN continues to be a hot performer. Iger reminded investors during the call just how well the network is doing from a 10,000-foot view.
ESPN's ad revenue continues to grow, thanks to its proven ability to reach audiences that advertisers value most. In fact, ESPN's ad sales significantly outpace the market, growing three times faster than television advertising overall over the last six years.
Iger also said the company believed ESPN was well positioned for more success, noting that demand for live sports hasn't contracted and consumption is at an all-time high.
Expansion will benefit parks and resorts
Disney's parks and resorts segment, which contributed $805 million of the company's $3.5 billion in operating income, looks likely to see more growth for years to come, according to Iger. The growth will be driven by both domestic and international expansion.
And lastly on the Parks front, we have -- obviously, plans to build out -- domestically, we're building AVATAR Land and we're breaking ground, in fact soon, on Star Wars lands in the two domestic parks. And with Shanghai coming on board in June, while there are start-up costs this year, you can expect that that's going to drive growth for Parks and Resorts for many years to come.
Catering to a multiscreen generation
A key concern for some Disney investors has been about how well the mediacentric company will be able to manage a transition to a cord-cutting, multiscreen generation. Iger noted Disney has innovation on the way on this front.
And many of our brands, including Disney, Marvel, Star Wars, and ESPN are tailor made for over-the-top, direct-to-consumer, app-based video products. So, expect innovation and continued pursuit of new distribution opportunities.
Overall, Disney looks poised for further growth over the long haul. Studio entertainment and parks and resorts segments particularly look well positioned to benefit from more blockbusters and expansion, respectively.