Trading stocks during earnings season is all about surpassing expectations.
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In yesterday’s video, we discussed Etsy $ETSY
4,000 June 10 calls were bought.
This call buying hinted at a great quarter.
Etsy closed up 12% after-hours.
It posted its first quarterly profit since going public.
Expectations also hold true for movies.
Batman v Superman has made $863 M worldwide but feels like a failure.
It had supersized expectations.
And it didn’t make $1 B
It didn’t even make $900 M.
Disney $DIS has had pixie dust at the box office in 2016.
Their movies have soared at the box office.
Zootopia is currently the highest grossing film of 2016.
It has surpassed even the most optimistic box office projections.
The reviews were stellar.
The script was funny and thought-provoking.
There was not really any other family movies out there to compete with Zootopia.
And the reigning king of the box office for the past three weeks
Is Jungle Book.
The stunning visuals
and excellent reviews
have helped it earn almost $700 M ($690 M to be exact) in just 3 weeks.
It’s surpassed expectations.
This weekend Captain America Civil War comes out Thursday in the U.S.
This movie has the highest expectations out of the 3 Disney movies we’ve discussed.
It made $200+ M last week internationally.
It’s predicted to make $200 M domestically this weekend.
People predict it will make $1.4 to $1.6 B worldwide.
Disney reports Q1 earnings Tuesday May 10th after the bell.
Star Wars The Force Awakens was released in 2015.
But it generated $400 M in 2016.
With box office magic like this, you would think that people would expect Disney to have great Q1 earnings.
But films account for only 15% of the company’s profits.
Theme parks are doing well.
Disney has raised admission rates and annual pass rates.
They’ve implemented surge pricing like Uber has.
However, theme parks make up only 20% of Disney’s profits.
50% of Disney’s profits come from its TV networks like ABC & ESPN
“Cord cutting” will determine whether Disney’s stock can get its magic back.
Thanks for watching our video before going out to see Captain America Civil War.
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