The Walt Disney Co.’s (DIS, Financial) share price increased 5.29% (or $7.04) to $140.00 in extended trading on Thursday after the entertainer topped analyst ecpectations on fourth-quarter pro forma earnings and revenue for fiscal year 2019.
Walt Disney posted pro forma earnings per diluted share of $1.07 (down 28% year over year), topping analyst expectations by 10 cents, on $19.1 billion in revenue (up 33.5% year over year). Fourth-quarter revenue topped projections by $80 million.
The US-based entertainer manages its business through four main segments, which reported the following changes from the year-ago quarter. Media Networks’ revenue of $6.51 billion marked a 22% increase; Parks, Experiences and Products’ revenue of $6.66 billion marked a 8% increase; Studio Entertainment’s revenue of $3.31 billion marked a 52% increase; and Direct-to-Consumer and International’s revenue of $3.43 billion marked a 316% increase.
“Our solid results in the fourth quarter reflect the ongoing strength of our brands and businesses,” Chairman and CEO Robert A. Iger commented. “We’ve spent the last few years completely transforming The Walt Disney Company 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 November 12.”
Furthermore, total segment operating income increased by 5% to $3.44 billion thanks to higher sales reported in Disney Vacation Club and merchandise licensing as well as higher guest spending reported by Disneyland Resort. In contrast, the net income from ongoing operations of $785 million declined 66% and cash flows from ongoing operations of $1.72 billion declined 55%. Walt Disney saw a sharp deterioration in the fourth quarter free cash flow of $409 million, down 85% from the prior year.
Walt Disney also posted figures for the entire year of fiscal 2019. Full year revenues were $69.57 billion in 2019 compared to $59.43 billion in 2018, a 17% gain. Regardless of revenue growth, total segment operating income decreased 5% to $14.87 billion and pro forma earnings per diluted share dropped 19% to $5.77.
The yearly cash flow statement also reported a lower operating cash flow of $5.98 billion, a 58% slump, and a lower free cash flow of $1.11 billion, an 89% slump. The decrease resulted from the sustainment of tax obligations related to the spin-off of Fox Corporation following Disney's acquisition of 21st Century Fox, a lower operating profit, a higher financial cost and increased spending for social contributions and film/TV production.
As of Sept. 28, 2019, the balance sheet of the Walt Disney Company had $5.42 billion in cash on hand and equivalents, $22.8 billion in film and television costs, $58.59 billion in attractions, buildings and equipment and $23.22 billion in intangible assets. Total debt was nearly $47 billion and total equity was worth $93.89 billion.
Year to date, the share price of Walt Disney has risen 21% to around $132.96 at close on Thursday for a market capitalization of $239.51 billion. The share price is below the 120- and 70-day simple moving average lines, but above the 30-day SMA line.
Over the past year, the stock price has risen 13%. The 52-week range is $100.35 to $147.15.
The company pays quarterly dividends. On July 25, The Walt Disney Company sent an 88 cents cash payment per common share out to its shareholders, producing a 1.34% forward dividend yield (1.33% trailing 12-month dividend yield), based on Thursday’s closing share price.
Wall Street analysts have issued buy recommendations for the company on price targets averaging $154.18 per share, an almost 16% upside from Thursday's closing market price.
Disclosure: I have no positions in any securities mentioned.
Read more here:
- 3 High-Yield Large-Cap Stocks Beat S&P 500 Index Dividends
- 2 Notable Large Caps Deliver 3rd-Quarter Numbers
- 2 Holdings to Reduce Based on Analyst Recommendations
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
