The Walt Disney Company DIS made some very big announcements yesterday at its 2015 Annual Meeting. The company is planning a sequel to its smash hit Frozen while Star Wars: Episode VIII is ready for a May 26, 2017 release. Shares of the company touched a 52-week high of $107.33 yesterday, before closing at $107.17, up 4.2%.
Disney will also be producing a spin-off movie of the Star Wars franchise titled Rogue One set for a Dec 2016 release. Star Wars, belonging to Lucasfilms, is one of the most popular as well as profitable movie franchises ever. Lucasfilms was acquired by Disney in 2012 for a whopping $4 billion.
With Frozen, Disney is looking at building another mega franchise. Frozen, released in 2013, became one of the highest grossing animated movies of all time with over $1.2 billion in box office receipts. The movie’s merchandise dominated the top selling toys list over the last holiday season.
Given the overwhelming response, it was only a matter of time before Disney announced its sequel. The creative unit and the cast of the first film will be back for the sequel. No official release date has been announced yet.
Disney has been on a roll for sometime now. The company’s movie business is doing stupendously well. Fiscal 2014 greatly benefited from the stellar performance of Frozen, followed by Marvel’s Captain America: The Winter Soldier, Guardians of the Galaxy and Maleficent. The success led the company to post the better-than-expected results in all the quarters. In the year, Studio revenues of $7.3 billion grew 22% while operating income of $1.5 billion increased over two folds.
However, studio segment revenues failed to impress in the first quarter of fiscal 2015 due to tougher year-over-year comparisons. However, this is not a concern as Disney has a solid movie slate going ahead.
Disney boasts of an impressive line up of 21 big budget movies up to 2017 as against 13 in the last three years. After a “Marvel”ous year, Disney will be bringing to celluloid quite a few new Marvel characters including Ant-Man, Black Panther and Dr. Strange. Along with Avengers: Age of Ultron, Ant-Man is one of the highly anticipated movies of 2015. There will also be sequels to Captain America, Guardians of the Galaxy and Thor.
Also, after phenomenal success of Frozen, Pixar has in line a number of animated movies which include Inside Out, The Good Dinosaur and Finding Dory . Moreover, 2017 will have Toy Story 4.
Apart from movie related news, the shareholders at the meeting also approved appointment all 10 members of Disney’s board of directors and the board‘s recommendations on the company’s auditor and the advisory vote on executive compensation.
Disney currently is Zacks Rank #2 (Buy) stock. Other stocks worth consideration include Pearson plc PSO, Gannett Co., Inc. GCI and New Media Investment Group Inc. NEWM. All carry the same rank as Disney.
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