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Nov. 10, 2019, 11:48 a.m. EST

Disney shares rise 5% on jump in revenue

Launch of Disney+ in investors’ sights as streaming wars rage on

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By Claudia Assis, MarketWatch , Jon Swartz


Walt Disney Co./Courtesy Everett Collection

Shares of the Walt Disney Co. gained 6% in premarket trade Friday after it reported quarterly results roughly in line with Wall Street analysts’ estimates — days before its much-anticipated streaming service begins.

Disney /zigman2/quotes/203410047/composite DIS +2.10%  said it earned $1.05 billion, or $1.07 a share, compared with $2.32 billion, or $1.55 a share, in the year-ago period.

Revenue rose 34% to $19.1 billion, from $14.3 billion a year ago.

Revenue from the company’s media networks rose to $6.5 billion, up 22% from $5.3 billion a year ago. Revenue from parks and resorts came in at $6.65 billion, up 8% from $6.14 billion a year ago. Disney’s studio entertainment segment brought in $3.3 billion in revenue, up 52% from $2.2 billion last year, thanks to strong box-office numbers.

“We’ve spent the last few years completely transforming the Walt Disney Co. to focus the resources and immense creativity across the entire company on delivering an extraordinary direct-to-consumer experience, and we’re excited for the launch of Disney+ on Nov. 12,” Disney Chief Executive Robert Iger said in a statement announcing the results.

Analysts polled by FactSet had expected Disney to report adjusted fiscal fourth-quarter earnings of 94 cents a share on sales of $19.2 billion.

See also: Roku stock tumbles as analysts say modest beats fail to justify massive rally

The company’s $6.99-per-month streaming service, Disney+, is scheduled to launch next week, featuring content from Marvel, Pixar, “Star Wars,” National Geographic and more. During a conference call with analysts late Thursday, Iger said he was not too concerned with competing services but he did not disclose pre-sale numbers for Disney+.

Disney+ also announced a distribution deal with Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.64%   to carry its content on Fire TV, as well as through Samsung Electronics /zigman2/quotes/209800866/delayed KR:005930 +1.67%  and LG Electronics /zigman2/quotes/209966407/delayed KR:066570 +5.79%   smart TVs. Disney said beginning next year, its FX channel will create original content for Hulu, which Disney also owns.

The importance of Disney+ was underscored by “an extensive discussion” of it at the start of a conference call with analysts, Forrester Research analyst Jim Nail told MarketWatch in an email message. “Disney+ reinforces how much priority they are putting into the [direct-to-consumer] business,” Nail said. “They are connecting all Disney assets to Disney+, which is a good move to drive subscriptions and a significant investment in giving the service a fast start.”

The entertainment giant faces a gantlet of rivals, new and old, in the burgeoning streaming market: Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.65%  , which launched Apple TV+ on Nov. 1; industry leader Netflix Inc. /zigman2/quotes/202353025/composite NFLX -0.12%  ; and forthcoming services from AT&T Inc.’s /zigman2/quotes/203165245/composite T +0.67%  HBO Max and Comcast Corp.’s /zigman2/quotes/209472081/composite CMCSA +1.58%  NBCUniversal’s Peacock.

In August, Disney reported fiscal third-quarter profit and sales that missed Wall Street’s expectations, a disappointment Disney pinned on the integration of its $71 billion acquisition of assets from 21st Century Fox.

Disney had projected that the new business would skim about 35 cents a share off its profit, but it subtracted around 60 cents a share.

Disney shares have gained 20% so far this year, compared with 23% and 19% for the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.34%  and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.13%  , respectively, in the same period.

/zigman2/quotes/203410047/composite
US : U.S.: NYSE
$ 118.66
+2.44 +2.10%
Volume: 12.43M
July 14, 2020 4:03p
P/E Ratio
40.04
Dividend Yield
0.00%
Market Cap
$209.92 billion
Rev. per Employee
$295,532
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,084.00
-20.00 -0.64%
Volume: 7.23M
July 14, 2020 4:00p
P/E Ratio
147.32
Dividend Yield
N/A
Market Cap
$1548.20 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/209800866/delayed
KR : S. Korea: KRX
54,700.00
+900.00 +1.67%
Volume: 24.05M
July 15, 2020 3:30p
P/E Ratio
17.45
Dividend Yield
2.59%
Market Cap
₩357626.68 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/209966407/delayed
KR : S. Korea: KRX
74,900.00
+4,100 +5.79%
Volume: 2.50M
July 15, 2020 3:30p
P/E Ratio
27.76
Dividend Yield
1.00%
Market Cap
₩11609.47 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 388.23
+6.32 +1.65%
Volume: 42.75M
July 14, 2020 4:00p
P/E Ratio
30.44
Dividend Yield
0.84%
Market Cap
$1655.33 billion
Rev. per Employee
$1.98M
loading...
/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 524.88
-0.62 -0.12%
Volume: 15.08M
July 14, 2020 4:00p
P/E Ratio
106.24
Dividend Yield
N/A
Market Cap
$231.12 billion
Rev. per Employee
$2.22M
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 29.96
+0.20 +0.67%
Volume: 30.60M
July 14, 2020 4:02p
P/E Ratio
15.17
Dividend Yield
6.94%
Market Cap
$212.04 billion
Rev. per Employee
$637,332
loading...
/zigman2/quotes/209472081/composite
US : U.S.: Nasdaq
$ 41.18
+0.64 +1.58%
Volume: 21.03M
July 14, 2020 4:00p
P/E Ratio
16.32
Dividend Yield
2.23%
Market Cap
$185.03 billion
Rev. per Employee
$513,625
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,197.52
+42.30 +1.34%
Volume: 2.63B
July 14, 2020 5:13p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
26,642.59
+556.79 +2.13%
Volume: 407.34M
July 14, 2020 5:13p
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Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW. Jon Swartz is a senior reporter for MarketWatch in San Francisco, covering many of the biggest players in tech, including Netflix, Facebook and Google. Jon has covered technology for more than 20 years, and previously worked for Barron's and USA Today. Follow him on Twitter @jswartz.

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