Walt Disney Company (DIS) Earnings Preview: ‘Monster’ Profits In Q4, FY 2013

The Walt Disney Company (NYSE:DIS) is expected to report higher fiscal fourth-quarter and full-year 2013 earnings on Thursday, with summer attendance and per-guest spending increases boosting its theme parks, and the success of “Monsters University” offsetting the big-budget flop “The Lone Ranger.”

The Burbank, Calif., media conglomerate is expected to show net income of $1.38 billion, or 75 cents per share, for the three-month period ended Sept. 30. That’s an increase of 10.7 percent over the $1.24 billion, or 68 cents per share, reported for the same period last year. Disney’s revenue is expected to rise 5.7 percent to $11.40 billion, from $10.78 billion a year earlier, according to analysts polled by Thomson Reuters.

For FY 2013, Disney’s annul net income is expected to hit $6.15 billion, or $3.37 per share, an increase of 9.8 percent over FY 2012. Annual revenue is expected to rise 6.1 percent to $44.87 billion. Disney will report fourth-quarter and full-year fiscal 2013 results on Thursday at approximately 4:15 p.m., EDT, with a live conference webcast starting at 5 p.m.

Ratings gains across Disney’s cable and broadcasting networks helped boost its largest unit, Media Networks. As of late September, viewership was up 17 percent at ESPN, which was buoyed by NFL football. The network’s ratings success comes despite the August launch of Fox Sports 1 from Rupert Murdoch’s 21st Century Fox Inc. (NASDAQ:FOXA), which is aiming to create a viable competitor to Disney’s cable-sports juggernaut. Quarterly revenue for the Media Networks unit is expected to reach $5.26 billion, up from $4.88 billion for the same period last year, according to David Miller, an analyst with B. Riley & Co.

Following record spring attendance at its theme parks near Orlando, Fla., Disney’s Parks and Resorts unit is expected to show another strong quarter, with revenue rising 9 percent to $3.73 billion, according to Laura Martin, an analyst with Needham. Martin also expects a strong quarter for Disney’s Consumer Products unit, with revenue up 12 percent to $990,000.

The fourth quarter was murkier for the Walt Disney Studios unit, which released a mixed bag of late-summer movies. The animated “Monsters University,” released June 21, was a monster hit, earning a domestic box-office gross of $268 million. It was the fourth-highest-grossing movie of the year, and Disney’s second-biggest hit behind “Iron Man 3,” which was released in early May. Conversely, the Johnny Depp vehicle “The Lone Ranger,” released on July 3, was a critical and commercial flop, earning just $89 million domestically on a $215 million production budget. The film’s producer, longtime Disney collaborator Jerry Bruckheimer, parted ways with Disney in September, although he has denied in reports that “Ranger’s” failure had anything to do with his exit.

According to Martin, Disney’s long-struggling Interactive unit, which includes Disney’s family of parenting blogs and websites, is showing signs of a comeback, with revenue expected to rise 10 percent to $210,000.

“‘Star Wars’” merchandise and the carryover success from the theatrical release of ‘Planes’ and the success of ‘Monsters, Inc.’ should translate into higher revenue than we previously anticipated,” Martin said in an October research note.

Disney shares closed Tuesday at $68.85, up 0.06 percent.

Correction: An earlier version of this story incorrectly stated Disney's net income for Q4 2012: It was $1.24 billion, not $1.83 billion.