How The Walt Disney Company’s (DIS) Recent Earnings Fared Against The Long Term Trend
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on The Walt Disney Company (NYSE:DIS) useful as an attempt to give more color around how Walt Disney is currently performing. View our latest analysis for Walt Disney
Did DIS perform worse than its track record and industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine various companies in a uniform manner using the most relevant data points. For Walt Disney, the latest earnings is $8,980M, which compared to the prior year’s figure, has dropped by -4.36%. Given that these figures may be somewhat short-term, I have computed an annualized five-year figure for Walt Disney’s earnings, which stands at $7,046M. This suggests that though earnings declined against the previous year, over a longer period of time, Walt Disney’s profits have been growing on average.
What’s enabled this growth? Well, let’s take a look at whether it is merely due to an industry uplift, or if Walt Disney has seen some company-specific growth. Over the last couple of years, Walt Disney increased its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the US media industry has been growing its average earnings by double-digit 10.21% over the prior twelve months, and 11.01% over the past five. This shows that whatever uplift the industry is benefiting from, Walt Disney has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Walt Disney to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for DIS’s future growth? Take a look at our free research report of analyst consensus for DIS’s outlook.
2. Financial Health: Is DIS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
