Walt Disney reported a 26% drop in earnings as the crisis prompted business customers to cut down their ad sales and consumers’ reluctance to spend. But Rob Iger gave a slight hint of optimism saying that the worst may be over for its media networks and theme park businesses.
Revenue fell 7% to $8.09 billion thanks to their aggressive discounting in their domestic parks. But net income fell by almost 50% to $613 million from $1.13 billion a year earlier.
Revenue for the theme park business dropped 12% compared to a year earlier. While the movies studios reported a 21% decline. The company’s consumer products licensing business grew 9% but the increase is reflected from their discounts at operating income for that segment dropped 24%. Revenue for interactive media fell 17%.
I like the company’s constant ability to adapt quickly to current and future technologies such as their increased stake in Hulu.
This company is a good play for a long-term perspective as the fundamentals of the company are strong. The 150 MA seems to been flattening out signaling stability. But I think it is still considered a long shot to see this company return back to its 52-week high by the end of the year. Short term probable price target is $25.30 from a technical perspective on the 200 day MA.
Will see how full market participation reacts in tomorrow’s open. Personally I am not yet a buyer as other sectors serve greater potential in this current situation. But it is great for long term investors.
Source: Reuters
