Walt Disney Earnings Preview

Walt Disney (DIS, $31.27, up $0.35) reports earnings after the closing bell today and all signs are pointing towards a good quarter. Disney’s profit jumped 18% to $1.1 billion, or $0.58 a share when they reported last time out. This time around Wall Street is expecting a profit of $0.61 a share on revenue of $9.1 billion for the quarter.

Disney has a solid film and broadcasting division producing such hits as National Treasure: Book of Secrets, Enchanted and its Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour. The studio entertainment division saw its revenue jump 61% to $377 million with the success of these films and analysts expect growth to continue.

The company also owns theme parks, ABC television, ESPN, and radio stations, which should also contribute to the bottom line. Options traders are targeting the August 32.50 calls (DISHZ, $0.60, up $0.15) and the August 30 puts (DISTF, $0.60, down $0.15). Volume in the puts is nearly double the action in the calls as 13,000 contracts have traded thus far.

Rick Rouse
Rick@OptionsMentoring.com

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