DIS - The Walt Disney Co - result surpassed analysts’ expectations by 23.1%

The Walt Disney Company (DIS), a Zacks #1 Rank stock, topped the consensus earnings estimate for 15 straight quarters. The company recently announced two major resort expansions to Walt Disney World and will double the size of its cruise business. Analysts have been upping their profit forecasts for both this year and next. The Board of Directors boosted its annual dividend by 14.8% in late-November. DIS has a current dividend yield of 0.90%. Full Analysis The Walt Disney Company, through its subsidiaries, operates as a diversified entertainment company worldwide. DIS operates in four segments: Media Networks, Parks and Resorts, Studio Entertainment and Consumer Products. When it comes to beating the Street’s earnings estimate, DIS rarely disappoints. The company topped the consensus estimate for 15 straight quarters. Furthermore, when DIS surprises to the upside, it usually does so by a large margin, including double-digit surprises on 10 occasions. On Feb 7, DIS posted first-quarter fiscal 2007 profits of 48 cents per share. The result surpassed analysts’ expectations of 39 cents by 23.1% and earnings in the prior-year period by 37.1%. Revenues jumped 9.8% to $9.725 billion from $8.854 billion in the same period last year. The impressive quarter was fueled by DIS’s studio entertainment division, where revenues increased 29% to $2.6 billion and operating income more than quadrupled to $604 million. President and CEO Bob Iger stated, “I am very pleased to report such strong quarterly earnings to kick off 2007. These results are particularly gratifying given the great year we had in 2006 and are another clear sign our strategy is driving growth and creating shareholder value.” During the first quarter, DIS repurchased 29 million shares for a total cost of $957 million. As of Dec 30, 2006, the company was still authorized to buy back approximately 177 million additional shares. In addition to returning shareholder value through share buybacks, DIS declared an annual cash dividend of 31 cents per share in late-November. This amounted to a 14.8% increase over the prior year's dividend. The company has a current dividend yield of 0.90% and a five-year average dividend yield of 1.0%. On Mar 1, DIS announced two major resort expansions to Walt Disney World. The first will be a 900-acre golf community with an as yet undetermined-sized Four Seasons hotel. Work on the luxury resort could begin this year, and the hotel is projected to open in 2010. The second project is targeted to the value- and mid-priced market and will include a mix of 4,000 to 5,000 non-Disney branded time share and low- to mid-rise hotel units. Shops, restaurants, entertainment venues and clubs will also be developed. Other expansion can be found in its cruise business, with DIS doubling its size by adding two ships, scheduled to launch in 2011 and 2012. The ships will each be two decks taller than the two existing Disney cruise ships, Disney Magic and Disney Wonder. Consensus earnings estimates for both this year and next experienced seven-cent jumps to $1.79 and $2.00, respectively, over the past 60 days. Earnings per share are expected to grow by 11.7% over the next 3-5 years. The company’s return on equity doubles that of the industry average—12% compared to 6%. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home