Late last year, the Walt Disney Company (NYSE:DIS) blew up the formula for its enduring-but-stagnant “Princess Culture,” downplaying the outmoded message that true happiness relies on a handsome prince and advancing the idea that sisterhood conquers all.
(The filmmakers also brought in hit songwriters and hired an actress with a killer voice.)
The Mouse House is expected to report a double-digit jump in its fiscal second-quarter profit on Tuesday, thanks in part to snowballing profits from “Frozen,” a cultural juggernaut that shows no signs of cooling off. The Burbank, California, media conglomerate is expected to show net income of $1.69 billion, or 95 cents per share, an increase of 21 percent over the $1.45 billion, or 79 cents per share, reported in last year’s fiscal second quarter. Analysts polled by Thomson Reuters expect, on average, Disney revenue to rise 6.4 percent to $11.23 billion from $10.55 billion for the three-month period ended March 31.
Disney will report financial results after the bell on Tuesday. A live webcast is scheduled for 5 p.m. EST with the company’s chairman and chief executive, Robert Iger.
Disney’s Studio Entertainment unit continued to profit most from “Frozen,” which was released theatrically in November and gained significant word-of-mouth traction. Starring the voices of Kristen Bell and Idina Menzel, the animated movie was praised by critics for downplaying the standard Disney-princess quest for true love, focusing instead on the sisters’ relationship.The fresh take -- and Menzel’s anthemic “Let It Go” -- helped transform “Frozen” from a mere hit movie into a meme with cultural legs, complete with “Frozen”-themed costume parties and viral YouTube videos featuring songs from the movie.
For Disney, that momentum continued throughout the second quarter. In January, six weeks after its release, “Frozen” accomplished the rare feat of reclaiming the top spot at the box office. To date, the movie has raked in a global box office total of more than $1.14 billion. That put “Frozen” in a small club of billion-dollar movies that includes Disney’s “The Avengers.” Analysts say it smashed nearly all performance expectations. “The film had ‘good but not great’ expectations, in our view, yet has become one of Disney’s most successful animated films ever,” Jeffrey S. Thomison, an analyst with Hilliard Lyons Equity Research, said in a February research note.
Disney’s largest unit, Media Networks, had more mixed second-quarter results. A+E Networks, a Disney joint venture with Hearst Corp., has been on a ratings high with shows like “Walking Dead” on AMC and “Vikings” on the History channel. Ratings ticked up slightly at ESPN, which is still an unmatched sports powerhouse despite the emergence of rival network Fox Sports One. On broadcast, conversely, ABC struggled during NBC’s coverage of the Winter Olympics in Sochi, Russia. Ratings have been down at ABC in general. Despite those challenges, the Media Networks division is expected to post a 4 percent increase in revenue to $5.16 billion, according to Marci Ryvicker, a senior analyst for Wells Fargo & Co. (NYSE:WFC).
The company’s Parks and Resorts unit is also expected to show gains, largely because of a ticket price increase at the Walt Disney World resort near Orlando, Florida. The hike, which amounted to between 4 and 5 percent depending on the ticket, boosted per-guest spending at the expansive resort. The division is expected to report revenue of $3.53 billion, an increase of 7 percent, according to Ryvicker. It was a similar story at the smaller Consumer Products unit (a 7 percent increase to $813 million), which benefited from the popularity of “Frozen” merchandise.
Disney ended the quarter with a surprise announcement that it will acquire the YouTube network Maker Studios for $500 million. The deal attracted an avalanche of speculation about Disney’s aims to become a major player in online video.
In the here and now, though, it’s all about a plucky princess and the sister she reconnected with. In short, analysts say, it will be a long time before Disney puts this emerging cultural touchstone on ice. As Thomison pointed out, “Frozen” is being integrated into Disney theme parks and a Broadway musical is already in the works. And come October, expect to see innumerable Annas and Elsas dressed up and on the hunt for Halloween candy.
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