Both The Walt Disney Company (DIS) and Groupon (GRPN) reported quarterly earnings after the bell Tuesday, and the two vastly different entertainment companies produced vastly different results. While the film and TV conglomerate beat estimates on both the top and bottom lines, the daily deals Internet firm missed on sales and guided lower.
Disney posted its highest earnings per share in history at $1.28 per share on revenues of $12.446 billion. This represents 8% growth year over year and a nearly 3% beat on the revenue side compared to expectations. For earnings, Disney posted a 9.4% positive surprise, in-line with the 10% positive surprise average of the previous four quarters. Studios gained more than 100%, and operating income for its Parks division grew 23% from the fiscal Q3 of 2013.
Obviously Disney has been riding high with the unparalleled success of its animated musical Frozen, but also Captain America, Maleficent and present summer blockbuster Guardians of the Galaxy have kept Disney on a big winning streak. Much of the recent success (not related directly to Frozen) can be traced to Disney's 2009 purchase of Marvel Entertainment, which has demonstrated a healthy stream of comic book superhero characters that have proven to be highly successful summer movie fare.
Groupon's difficulties continue, however. In after-market trading following the company's Q2 earnings release, GRPN shares have fallen nearly 17%. Although the company's total active user numbers have gotten better, guidance for Q3 was notably worse: EBITDA was expected to bring in $76 million next quarter, but Groupon now is guiding toward between $50-70 million. And with Q2 revenues 2% lower than had been anticipated, it's clear Groupon is still finding it tough to break out in a positive direction in a crowded space.
Both Disney and Groupon sported Zacks Rank #3 (Hold) ratings before earnings were announced. Analysts will likely be getting busy revising estimates for both companies in the wake of the earnings reports, and we may see some shifting in the Zacks Rank as a result.
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