What to Watch Today: Disney's Q3 Earnings Avenge 'John Carter'

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It's not a small world after all for Disney (DIS).

The family entertainment giant served up mixed financial results on Tuesday night, spearheaded by the most profitable quarter in the company's history.

Earnings soared 31% to $1.01 a share in its fiscal third quarter, significantly better than the $0.93 a share that Wall Street was expecting, though revenue's climb 4% to $11.1 billion fell short. Analysts were banking on a 6% top-line pop from the company behind ESPN, ABC, and its namesake theme parks.

The good news is that all five of Disney's segments posted improving operating profits. Only its interactive software division managed to clock in with a year-over-year decline in revenue. However, it also needs to be pointed out that each of Disney's segments was limited to single-digit percentage advances.

Disney is growing, but it's growing slowly.

Things should still be encouraging in the near term. Marvel's The Avengers and Pixar's Brave have been box office hits, offsetting the colossal flop of John Carter earlier this year. Disneyland's Cars Land has been a turnstile magnet, and the Magic Kingdom's expansion of Fantasyland later this year will also draw big crowds.

Disney may only be taking mouse steps when it comes to revenue, but they're mouse steps in the right direction.

Other Companies to Watch Wednesday

  • priceline.com (PCLN) shares are facing a bumpy descent after a disappointing quarterly report. Sure, the popular travel portal posted better than expected results. The market is simply concerned about the "name your own price" website operator's uninspiring guidance. Given that a good chunk of the company's bookings come from Europe, weakness shouldn't be much of a surprise.
  • Demand Media (DMD) is in demand after posting strong financials. The online content creator is also boosting its outlook for all of 2012 higher. Let's see if it can write that good news up and syndicate it through cyberspace.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Disney. The The Motley Fool owns shares of Walt Disney and Priceline.com. Motley Fool newsletter services have recommended buying shares of Priceline.com and Walt Disney.


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