Get in Shape for Earnings Season: Wal-Mart

The final quarterly earnings season of 2008 is starting to wind down. This week, there was an earnings release from only one Dow Jones Industrial Average component company:

Thursday, Nov. 13:

Wal-Mart (WMT Quote)

The following are key insights and advice from TheStreet.com to help you decipher the recent deluge of data.

From Dividend.com: Wal-Mart Wary of Economy:

Wal-Mart just reported a 10% increase in third-quarter profit to $3.14 billion, or 80 cents per share, in the quarter ended Oct. 31, up from $2.86 billion, or 70 cents per share, a year earlier.

The company is recognizing the economic difficulties around the world, and plans to push its position as the lowest-cost retailer with its latest marketing "save money, live better" campaign. The company is also scaling back its store growth and capital expenditures while focusing on remodeling existing locations.

As for the next quarter, management is lowering expectations for EPS to a new range of $1.03 to $1.07, below the consensus of $1.11.

We had removed shares of Wal-Mart from our "Recommended" list back on Oct. 7, when the shares were trading at $57.90...

Read the full version of Dividend.com: Wal-Mart Wary of Economy.

To listen to Wal-Mart's pre-recorded earnings call, click here.

Earnings Season, Week Five: Disney

From DIS Preview: Great Export Story Coming to an End?

...investors are turning their attention to 2009 and the question of how well Disney will weather the recession. The business is far more stable than in the past. With half of cash flow coming from subscription-driven cable networks, for instance, there is cushion to offset the natural operating leverage in theme parks and films. If attendance declines 10% at the parks, operating profit could be down 20%; broadcasting revenue down 10% will result in profits down 30%. Studio entertainment faces tough comps, too...

Read the full version of DIS Preview: Great Export Story Coming to an End? (RealMoney access required).

From DIS Summary: Feeling the Pinch:

Management led off by outlining the impact of the economy on Disney's business. The total destruction of the auto industry is starting to flow through the media results, since automakers are (were?) big advertisers, while the amusement parks held up until quarter end (but not much after that). Retail "could" be affected during the holidays, but "certainly" will be in 2009. Disney is not immune from economic impact, but as franchises go, its one of the better ones in which to take shelter during the storm.

By segment:

Media networks sales were up 4% to $4.2 billion with income flat at $1.1 billion.

Parks and resorts grew revenue 7% to $3.0 billion, while shrinking income 4% to $412 million.

Studio entertainment revenue decreased 5% to $1.5 billion, with income cut nearly in half to $98 million.

Consumer products sales grew 41% to $812 million; income was also up 14% to $176 million.

Read the full version of DIS Summary: Feeling the Pinch (RealMoney access required).

TheStreet.com TV Rewind: Cramer on Disney. To help you make sense of Disney's latest earnings, get some context with Jim Cramer's analysis of the company's earnings report from the previous quarter.

From Cramer: How Disney's Kingdom Grows (Video, July 31):

Cramer: "I'm from the Procter & Gamble(PG Quote) school -- one of my favorite companies... Procter & Gamble has an annual report that I regard as being the most thoughtful annual report in America... And one of the things they emphasize is how hard it is to have a billion-dollar brand... Disney has Pirates of the Caribbean, which is a billion-dollar brand and at a fraction of the cost of what it takes Procter to develop and support a billion-dollar brand... The relevant metric that Disney should compare itself too are other companies that build brands... and how little it costs for them [Disney] to develop franchises and how they're able to blow out the franchises over many different venues, because that shows you the long term strength of the company."

To watch the video, click the player below:

From Cramer: Disney's Charmed (Video, July 28):

Cramer: "The actual franchise value of High School Musical is really beginning to accelerate... ESPN is very strong... Neither Viacom (VIA Quote), nor CBS (CBS Quote) has a portfolio of properties that continue to generate a lot of cash. It's kind of like Nike (NKE Quote) does off the Jordans... I think people should be looking at Disney as a creator of franchises. I am using the analogy of how hard it is for Procter & Gamble to create a new shampoo... Disney needs to be looked at as a company that can launch franchises. I'm trying to create a 'new world metric' here for Disney, which is that how much does it cost to launch a product that has... a continual stream of revenue. And Disney is the lowest cost producer of franchises."

Watch the video on TheStreet.com TV.

Plus, don't miss Cramer's 'Stop Trading!': Don't Desert Disney (Nov. 3).

Continue to sharpen your earnings season skills. Next up:

Pages 2 and 3: TheStreet.com Reload: The Last Four Weeks of Dow Earnings

Page 4:

The Finance Professor: Beginner's Guide to Earnings Calls

Five Missteps to Avoid in Earnings Season

Conference Calls: The Good, the Bad, the Misunderstood

To Guide or Not to Guide: A Look at Earnings Guidance