$DIS earnings tonight! Might not go well, but it won't matter

Disney is going to report earnings tonight!

No major activity was expected to happen during this last quarter, with only 1.5 major studio releases (Beauty and the Beast and part of Rogue One). Beauty and the Beast did beat expectations however, earning almost $1.2 billion in box office revenue so far, and is still killing it in the Asian markets. Unfortunately, any success in that revenue stream may be overshadowed by the fiasco that is ESPN.

Massive public layoffs have occurred at ESPN due to loss of subscribers and revenue. In reality cutting 100 on-air personalities isn't actually financially significant to the company, as ESPN pays the NFL $2 billion alone each year just to show football games, but the public perception of ESPN and their streaming in general will definitely take a hit. It's obvious that Disney is implementing some major changes at ESPN, but it will be hard to predict how well those changes play out as digital distribution and streaming becomes more competitive. Rumors of cable packages being bundled without ESPN are already circulating. Keep in mind that Disney gets 40% of their entire revenue stream from ESPN.

At the end of the day though, we're still talking about the powerhouse that is Disney. In the long run they've still got their very popular and successful parks (the new Shanghai one is doing very well), as well as the Star Wars and Marvel franchises. Each major movie released can realistically earn over $2 billion and $1 billion respectively. Consumers are still ravenous over those franchises, and the demand has no real end in sight. ESPN, even in the worst case scenario, will just adapt to meet consumer streaming preferences; I mean, it's not like Americans are just going to stop watching football. Historically, even when Disney releases bad earnings, the dip in ticker price is extremely temporary. Public confidence in Disney is still quite strong, even if it isn't in ESPN. For those looking to buy the dip, this might be your chance as it's currently at a -4% 30-day low. I just bought in myself.

I agree with going long before earnings. Analysis expect the earnings per share to go up 6.6%, but I'm guessing that may be overly optimistic, I would say it's going to be around +3% or 1.60 per share. There won't be any significant impact to the ticker price. We'll continue to see $DIS go up post-earnings

Submitted May 09, 2017 at 12:26PM by pizzatoppings88 http://ift.tt/2q3o0EV