Parks & Movies Boost Disney, While the Media Segment Struggles

The Walt Disney Company (NYSE: DIS) reported earnings (PDF link) after the market closed on Tuesday, May 8th, and the “House of Mouse” posted solid results, driven primarily by blockbuster movies and attendance at its amusement parks:

  • Net revenue of $14.5 billion, up from $13.3 billion (9% increase year-over-year)
  • Net income of $2.94 billion, up from $2.39 billion (23% increase YOY)
  • Earnings of $1.95 per share, up from $1.50 per share (30% increase YOY)

If you’ll recall from a few weeks ago, Disney was one of two investments that I was keeping a close eye on. I was concerned about the subscription base of the company, with carriage fees from cable companies providing a steady stream of revenue for the entertainment behemoth. However, in recent years, Disney has been losing subscribers as more and more people “cut the cord” and access their entertainment through non-cable providers like Hulu or Netflix. The draw of live sports just hasn’t been enough to keep people subscribed to cable, especially when most major sporting events are televised on stations that can be viewed by using an antenna if so desired. Continue reading

Solid Earnings from PepsiCo Point to Continued Growth Overseas

PepsiCo (NYSE: PEP) reported earnings last week, and the beverage and snack purveyor posted solid results:

  • Net revenue of $12.7 billion, up from $12.0 billion (4% increase year-over-year)
  • Net income of $1.34 billion, up from $1.32 billion (2% increase YOY)
  • Earnings of $0.94 per share, up from $0.91 per share (3% increase YOY)

If you’ll recall from a few weeks ago, the main thing I was watching for in my investment in PepsiCo was its non-soda business (through its ownership in Frito Lay and Quaker Foods) and its impact on the bottom line as people drink less sugary drinks in general. The company specifically mentioned a decrease in operating profit for both segments during the quarter, primarily driven by cost inflation and bonuses paid in response to the Tax Cuts and Job Act. However, productivity gains helped offset the losses felt, with Frito Lay and Quaker Foods showing an overall increase in 3% between the two segments. Continue reading

Record Results for Activision Blizzard Push Share Price Higher

Activision Blizzard (Nasdaq: ATVI) reported earnings after the market closed yesterday (May 3rd), and the game company continues to exceed its own expectations:

  • Record net revenue of $1.97 billion, up from $1.73 billion (14% increase year-over-year)
  • Net income of $500 million, up from $426 million (17% increase YOY)
  • Earnings of $0.66 per share, up from $0.57 per share (15.8% increase YOY)

If you’ll recall from a few weeks ago, the main thing I was watching for in my investment in Activision Blizzard was its subscribers, first for its legacy products from big game franchises like Warcraft and Call of Duty, but also from its users of its mobile games. Though it no longer break out individual game titles, it did highlight some usage numbers from some of its flagship properties. Continue reading

Square Continues Its Fast Growth Towards Profitability

Square (NYSE: SQ) reported earnings after the market closed on May 2, 2018, and the payment processor continues to show strong growth where it matters:

  • Total net revenue of $669 million, up from $462 million (45% increase year-over-year)
  • Gross payment volume of $17.8 billion, up from $13.6 billion (31% increase YOY)
  • Adjusted revenue of $307 million, up from $204 million (51% increase YOY)

If you’ll recall from a few weeks ago – and from my earnings reports on Visa (NYSE: V), PayPal Holdings (Nasdaq: PYPL), and Mastercard (NYSE: MA) – Square is part of my “War on Cash” basket. Unlike the others, Square is not yet profitable, and as the smallest of the four has some catching up to do, but nevertheless appears to be going in the same direction. Continue reading