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High hopes for Disney despite ‘Lone Ranger’ loss

Big Data Download

Investors can't judge Disney on fundamentals alone. Theme park and box-office revenue are expected to be key revenue drivers, according to one analyst.

Disney is expected to report a second-quarter theme park revenue increase of about 14 percent to 15 percent when it reports earnings after the bell, thanks to ticket price rises of about 10 percent, plus an expected increase in foot traffic, according to SureVest Capital Management Chief Investment Officer Robert Luna.

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"Disney's made some huge investments into the theme parks. Over $2 billion in the last few years," Luna noted on "Big Data Download." Theme park revenue makes up about a third of the Disney's total revenue, Luna said.

And on the film side, there may not be anything that can make up for investors' disappointment in the “Lone Ranger” film, which led to a decrease in second-quarter earnings expectations to about $1.01 per share from $1.05, according to Luna.

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"A lot of that [decrease] is due to the $150 million write-off that Disney's going to have to take for that film," Luna said. "It's definitely a big challenge when you're spending almost a quarter of a billion on a film that's bringing it just around $165 million as of the end of July."

But “Monsters University” cost less than $185 million to produce, according to Luna's estimates, and it made about $578 million in ticket sales as of the end of July, he said.

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In the next two to three years, Luna said he expects box office hits out of the Marvel franchise and Disney's recently acquired Lucasfilm business as well major revenue growth thanks to Shanghai Disney, which is slated to open in 2015.

"Disney has a very robust pipeline right now," Luna said.

-- Robert Luna and SureVest Capital Management own Disney shares.

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