Disney: Aggressive Expansion Paying Off

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Earnings Season always is shrouded in speculation and will make no exception for world’s largest corporate conglomerate, Disney. Find out below, what factors you should consider with the impending EPS results for Q2 being released.

It seems only yesterday that the Marvel Entertainment deal was completed for a whopping $4 billion in 2009, which in turn gave Disney the rights to one of the most well-known franchises in history, with a legacy spanning over 80 years, Marvel comics. This deal gave them the licenses for all comic characters and gave birth to one of the most successful cinematic endeavors, the Marvel Cinematic Universe.

Which, if you did not know, their last release Avengers: End Game (the last film in a movie arch spanning over 12 years) made an eye watering $2 billion since its release and it shattering numerous different box office records.

RecordFigure/Result                           Previous record holder
Fastest to $500M3 daysAvengers: Infinity
War – 5 days
Fastest to $1B 5 daysAvengers: Infinity
War – 11 days
Fastest to $1.5B8 daysAvengers: Infinity
War – 18 days
Fastest to $2B11 daysAvatar – 47 days
Highest opening
weekend  gross
$1.223BAvengers: Infinity War – $640M
Highest IMAX opening weekend gross$91.5BStar Wars: The Force
Awakens – $48M
Highest 3D  opening weekend gross$540MAvengers: Infinity
War – $366M

Though, Disney did not rest there with their aggressive expansion tactic, in 2012 we saw them make a deal for Lucasfilm (Star Wars), for $2.2 billion in cash and $1.85 billion in Disney stocks. But still,that is not even the tip of the iceberg when it comes to comprehending how large Disney is as a conglomerate. To put into perspective, below is a list of only a few assets Disney now own, or have a large share in;

  • Fox Entertainment Group (21st Century Fox, Sky Limited, Fox News)
  • ABC (American Broadcasting Company)
  • National Geographic
  • ESPN (Entertainmentand Sports Programming Network)
  • PIXAR Animation Studios
  • HULU (60% share in the 11-year-old streaming service)
  • 12 Disneyland Theme Parks, all over the world, across America, Asia and Europe.
Disneyland Paris

For more information, refer to this link for a full list of all assets owned. Based on the revenue and profits of Disney from the last three years alone, they estimated to have a net worth of nearly $130 billion, and have gained an unrivaled 35% in value in the last three years alone.

Revenue Structure for Walt Disney

So what does this mean for Disney and how will it affect the EPS?

With the second-quarter fiscal results being released after the market closing today, all eyes are currently focused on Disney due to the success of the latest Marvel cinematic release. You see, Disney intends to release Disney+ this year, following the proposed acquisition of the Fox brand for $52.4B in stock, and are currently aiming to market their subscription price around Netflix’s price of $8 a month to compete to top spot.

It really all boils down to what content is on their streaming service, and if you take into consideration, they have 100 years’ worth of Disney content, 80 years of Marvel, and 42 years of Star Wars content to work with, one can assume they will certainly attract a very large audience and will certainly make Netflix take heed. I cover this streaming services battle for top stop in my previous article, from there you will see all contenders and what strategies they have as we approach mid-year.

Previous EPS results

Quarter End
Per Share
December 201802/05/20191.841.57
September 201811/08/20181.481.31
June 201808/07/20181.871.97
March 201805/08/20181.841.68

Right now, many sources are saying that the EPS forecast is 1.57, based on the actual of 1.84. Based on all previous estimates, they have been correct nearly around 75% of the time and have also beaten. 

Let us know what you think may happen down below, do you think Disney will beat Netflix in the streaming services? will they continue to dominate the pop culture world and reap the benefits? And how will the success of the Avengers factor into their EPS? 

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