How Will Disney (DIS) Stock React to Today's Q4 Earnings? Jim Cramer Weighs In

Walt Disney (DIS) is scheduled to release its fourth quarter 2015 earnings results today after the market closes.
By U-Jin Lee ,

NEW YORK (TheStreet) -- The Walt Disney Co. (DIS) - Get Report  is scheduled to release strong fourth quarter 2015 earnings results today after the market closes. 

Analysts expect the entertainment and media company to report a year-over-year growth in earnings.

Their projections are $1.14 a share on revenue of $13.55 billion.

For the fourth quarter of 2014, the company earned 86 cents a share on revenue of $12.48 billion.

Yesterday, media stocks retreated on Time Warner's (TWX) news that it will slash its fiscal 2016 earnings forecasts. This comes as more and more consumers are ditching traditional pay-TV packages, or "cutting cords," Bloomberg said.

TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio, commented on this action, saying: "Lets say this- I am concerned after Time Warner that the company could have similar problems with cable but at the same time, Starwars and Shanghai Disney are fourth quarter and 2016 events. You can buy some now and some after but only if you have a multi-year perspective, which his actually the way to own Disney. But, I hazard to tell you what CEO Bob Iger has to say on the call after the dangers outlined in Time Warner's call."

So far, Walt Disney's film division has made $1.49 billion at the box office this year, and the company has high hopes when Star Wars: The Force Awakens, makes its debut on December 18, MarketWatch reports.

Walt Disney shares are retreating 1.09% to $112.02 on Thursday morning.

Separately, TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DISNEY (WALT) CO has improved earnings per share by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($5.09 versus $4.25).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 10.6% when compared to the same quarter one year prior, going from $2,245.00 million to $2,483.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market on the basis of return on equity, DISNEY (WALT) CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: DIS
Loading ...