Earnings Preview: Disney 4Q seen up amid weak TV

AP News
Posted: Nov 06, 2012 5:17 PM
Earnings Preview: Disney 4Q seen up amid weak TV

LOS ANGELES (AP) — When Walt Disney Co. reports its fiscal fourth-quarter results after the market closes on Thursday, analysts will look for further clues into the potential value of its planned $4.05 billion purchase of Lucasfilm and the "Star Wars" franchise, as well as the strength of the advertising market.

WHAT TO WATCH FOR: Last week, Disney announced it would by Lucasfilm and the "Star Wars" franchise from creator George Lucas, with plans to revive the movie series with a trilogy starting in 2015.

Analysts estimate that Lucasfilm generates about $800 million in revenue a year.

Further clues as to what Disney intends to do with the franchise will be of interest to investors, who believe the acquisition will dampen earnings until the next "Star Wars" film is released.

Investors are also watching the strength of the ad market. The start of the fall TV season was not a hit with audiences and ratings have fallen from last year. Compounded with the huge attention given to the London Olympics on NBC, it could be a difficult July-September quarter for the ABC network.

WHY IT MATTERS: Disney reaches consumers with its theme parks, movies, TV shows, video games, toys and clothes. It earns money through advertising, which gives an indication of the underlying health of the economy. Attendance and spending at its parks signal how willing consumers are to part with their discretionary income.

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WHAT'S EXPECTED: Analysts polled by FactSet expect Disney to post adjusted earnings of 68 cents per share on $10.9 billion in revenue.

LAST YEAR'S QUARTER: Last year, Disney earned an adjusted 59 cents per share on revenue of $10.4 billion.