Market Overview

The Walt Disney Company Is Too Influential, Just Come Along For The Ride


Disney (DIS) has proved itself as an influential company over recent years. Disney is even significant enough that it holds great consumer clout in relation to the global economy. There has been speculation Disney’s strong results from it second quarter earnings report on Tuesday, August 5th were from the success of Marvel.


“Our strategy of building strong brands and franchises continues to create great value across our company,” said Robert A. Iger, chairman and CEO of The Walt Disney Company. “ “We’re extremely pleased with these results and we are also thrilled with the spectacular performance of Guardians of the Galaxy, which holds great promise as a new franchise for our company and once again reinforces the tremendous value of Marvel.”


Disney's Marvel Comics new Star Wars comics and new Agents of SHIELD series are getting ready to launch soon for fans. Marvel’s release of Star Wars: Darth Vader series is scheduled for next February, followed by five miniseries issues of Star Wars: Princess Leia. The first version of Agents of SHIELD will be launched December.


The Burbank, California based mass media corporation’s increased operating income from program sales was driven by a lower average expense amortization rate and higher revenues led by Marvel's Agents of S.H.I.E.L.D. Initially a pioneer in the American animation industry, Disney has evolved into television, theme parks and live-action films.


The success of Marvel resulted in an impressive quarter. Marvel’s franchise includes the movie, "Captain America: The Winter Soldier", which came out in April of this year. The film, "Guardians of the Galaxy," has generated $181 million worldwide to date. Marvel’s acquisition has proven to show success of the files and the consumer products


Disney spurs M&A frenzy in media content which is a strong contributor to its growth. Last year the company generated $10.7 billion in profits. $6.8 billion had been derived from media networks alone.  Disney also owns ABC which includes the mega ESPN. Disney’s Media Networks contributed to boosting its revenues. For the quarter, media networks revenues increased 3% to $5.5 billion and segment operating income was relatively flat at $2.3 billion.


Since 2009, the company’s assets have grown by an estimate of $18 billion through big M&A of Lucasfilm, Marvel and capex at the Parks worldwide. Every acquisition has been a strategic investment for the company. The Walt Disney Company aims to further improve its brand in China, a country with the biggest population in the world.


Marvel's new Agents of SHIELD comic is poised to create new opportunities for Disney. Areas such as promotional avenues in cross promotion of placements and advertising for product placements could strengthen the franchise. Disney impacts its consumers and the global economy enough to deliver investor confidence for the long term.


Disney’s  M&A investments have proved to be longer tail returns. Overall, Disney has been consistent in its strategic initiatives with areas such as technology, international expansion and content to strengthen distribution.


The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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