Disney earnings: What to watch for at the studio

It'll be tough for Disney's first-quarter earnings to match last year's performance

The Walt Disney Co. will have a lot to live up to when it reports first-quarter earnings Tuesday afternoon.

Last year, Burbank-based Disney turned in a stellar first quarter, reporting net income of $1.84 billion, up 33% from a year earlier.

Disney's success was driven by its blockbuster "Frozen," which debuted in November 2013 and went on to generate more than $1.2 billion worldwide in box office receipts -- making it the top-grossing animated film of all time.

That film helped the company's studio unit post operating income of $409 million and revenue of $1.9 billion in the first quarter a year ago. Without "Frozen," it could be tough for Disney to match that performance in the most recent quarter, which ended Dec. 27.

The quarter saw the studio release the animated picture "Big Hero 6," which has grossed $485 million worldwide, and "Into the Woods," which has taken in $165 million worldwide, according to Box Office Mojo.

Analyst Laura Martin of Needham & Co. wrote in a recent report that the studio unit's revenue could decline 13% to $1.6 billion -- partly due to the absence of a hit like "Frozen."

She noted, however, that the studio would be buoyed by the home entertainment release of hits "Maleficent" and "Guardians of the Galaxy."

Analysts project Disney to deliver earnings per share of $1.08, according to investment research firm Zacks. A year ago, Disney posted earnings per share of $1.03.

"Frozen" may no longer be raking it in at the box office, but it remains a cash cow for Disney. Strong sales of merchandise related to the film are expected to boost Disney's consumer products division.

A year ago, that unit posted operating income of $430 million and revenue of $1.13 billion. Martin projects the division to report revenue of $1.2 billion, up 7% from a year ago.  

(Analysts including Martin project each of Disney's three other divisions -- media networks, interactive media, and parks and resorts -- to post higher revenue than the same quarter a year ago.)

Disney will report earnings after the closing bell on Tuesday afternoon. On Monday, the company's shares closed up a little more than 1% to $91.93.

The stock hit a 52-week high of $96.43 on Jan. 13.

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