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Reviews improve for Disney

Tuesday, May 08, 2012 - 02:15

May 8 - Walt Disney reported better-than-expected earnings, and analysts say the company is positioned for a promising future now that ''The Avengers'' has arrived to rescue its movie business. Bobbi Rebell reports.

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The Avengers are the reigning super heroes of the box office- and of Disney Studios- with total global ticket sales of around $655 million dollars in just its first 12 days. It's quickly wiping away the nightmare that was John Carter- Disney's devastating flop, which followed a string of box office misses. S&P Capital IQ's Tuna Amobi: SOUNDBITE: TUNA AMOBI, SENIOR MEDIA AND ENTERTAINMENT EQUITY ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "There is a lot of heavy lifting that is going to be required to try, to you know, create new franchises and monetize Marvel and this is a very good start." Amobi says the studio business only contributes about 10 percent of Disney's operating income. But hit movies, like The Avengers, feed into other parts of the company- including theme parks and merchandising; all that makes for a better overall storyline for parent company Disney. After the bell Tuesday, Disney reported earnings that beat forecasts- thanks in large part to business outside its movie studio like ESPN and its theme park business. The stock has been making fans out of investors- it's up close to 16 percent year to date- trading around $43 a share. Thomson Reuters Analyst Jharrone Martis: SOUNDBITE: JHARRONE MARTIS, ANALYST, THOMSON REUTERS (ENGLISH) SAYING: "According to Starmine it should be trading 10 dollars higher at about $53 dollars. The market is implying that the company is growing at 7.2 percent and according to Starmine it should be growing at 9.4 percent over the next 10 years." Wall Street is also giving good reviews to its $4 billion dollar purchase of Marvel back in 2009. SOUNDBITE: TUNA AMOBI, SENIOR MEDIA AND ENTERTAINMENT EQUITY ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "This could be one of the greatest you know deals that has been ever pulled off for any studio. In terms of the share incremental upside and keep in mind this doesn't even begin to scratch the surface on the licensing side which is really why Disney acquired that. Think about 4,000 plus comic book characters" That 4,000 may take some time to fully exploit. Disney is however gearing up at least three more movies based on The Avengers characters, ready to power the studio to a brighter future. Bobbi Rebell, Reuters.

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Reviews improve for Disney

Tuesday, May 08, 2012 - 02:15