Shares of The Walt Disney Company (NYSE: DIS), along with the other media conglomerates, have been pummeled this year amid concerns about slowing advertising sales and the Hollywood writers' strike. Though the decline
s are understandable for other companies, such as Time Warner Inc. (NYSE: TWX), they are overblown in the case of the house built by Mickey.
For one thing, the weak dollar makes Disney's resorts, particularly Florida's Walt Disney World, attractive for visitors from overseas. About 2.7 million of the 45.1 million in visitors to the Orlando area -- where Disney World is based -- come from overseas. About 53% of them came from Western Europe and 26% came from Canada, according to the Orlando Convention and Visitors Bureau. It would stand to reason that some of the drop off in domestic visitors could be made up from people from outside the U.S.
The cable channels continue to benefit from ESPN and the popularity of "Hannah Montana" on the Disney Channel. The ABC TV network will benefit from the popularity of "Lost" and "Desperate Housewives" and will also be helped by advertisements from the presidential election. Disney's movie studios also posted a solid box office in the quarter.
Disney's management team is well regarded on Wall Street. The company recently gave a five-year-extension to Chief Executive Bob Iger guaranteeing him a base salary of at least $2 million through 2013 with a potential for annual bonuses of $10 million.
As advertising budgets tighten, Iger is going to be earning every nickel.
Analysts expect Disney to report fiscal first quarter earnings of 52 cents per share on revenue of $10.04 billion. The company should be able to easily hit those targets. It reports results tomorrow.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
