One of the largest global entertainment companies, The Walt Disney Company (NYSE:DIS), has reported impressive results for its fiscal second quarter 2014. Thanks to the stunning success of its blockbuster animated film “Frozen”, the company’s profits and revenues came in well past our estimates. While the company reported a 41% jump in its earnings, revenues rose 10% year over year.
Walt Disney Earnings in Focus
Disney clocked earnings per share (EPS) of $1.11, well ahead of the Zacks Consensus Estimate of 97 cents. Moreover, revenues jumped 10% year over year to $11.65 billion, beating the Zacks Consensus Estimate of $11.22 billion.
Disney’s studio entertainment segment saw the biggest increase in operating income, up more than 100% year over year, buoyed by the incredible success ofFrozen and Thor: The Dark World.
Every single business segment of the company reported a jump in revenues. While the company’s Studio segment reported the biggest jump and brought in $1.8 billion in the company’s fiscal Q2, Disney’s Parks and Resorts fetched $3.56 billion, and Media and Networks $5.13 billion in the quarter.
Even the company’s struggling Interactive segment reported an operating profit of $14 million compared with a $54 million loss incurred a year earlier, primarily due to strength in sales of the Disney Infinity video game.
ETFs to Watch
Propelled by solid earnings results, Disney shares gained 0.56% following the earnings announcement in the after-market eventually closing a tad lower in the regular market.
Given the solid results and also considering the fact that the stock is decently valued at current levels (P/E is at 22), the stock might again move northwards to test its 52-week high of $83.65. This is especially true as Disney has a Zacks Rank #2 (Buy), suggesting it is expected to outperform the broader markets in the near term.
As a result, Consumer Discretionary ETFs that have the highest allocation to Disney are sure to be in focus in the coming days. Investors should closely monitor the movement of these funds and tap the opportunity from any gain in Disney’s share price.