Earnings Preview: Walt Disney Co.

NEW YORK (AP) — Walt Disney Co. reports earnings for its second fiscal quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Disney officially took over Pixar Animation Studios Inc. last week, after Pixar shareholders voted to approve the company’s $7.4 billion acquisition. The vote makes former Pixar Chief Executive Steve Jobs the single largest shareholder of Disney, with about a 7 percent stake. In April, Disney’s ABC said it would offer four prime-time shows including “Desperate Housewives” and “Lost” on its Web site for free for two months beginning in May as it continues to expand the ways consumers can watch TV online. The shows will include advertising that can’t be skipped over during viewing.

EXPECTATIONS: Analysts expect Disney to post a profit of 31 cents per share on revenue of $8.18 billion, according to Thomson Financial.

ANALYST TAKE: The second quarter “should be the most difficult quarter for Disney in fiscal 2006,” Merrill Lynch analyst Jessica Reif Cohen said in an April 18 client note. Reif Cohen, however, said Disney’s broadcasting and consumer products businesses have shown an improved outlook. She expects the company to post flat earnings of 31 cents per share, in line with the Street view.

“Results should improve significantly (in the second half), as Disney will benefit from revenue defferals at ESPN, easier comparisons at consumer products and a stronger line-up at the studio,” Reif Cohen said.

STOCK PERFORMANCE: Disney shares rose 14 percent in the quarter and are up 19 percent for the year so far. The stock recently fell 14 cents to $28.95 on the New York Stock Exchange.



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