Not So Happy Ever After

The happiest place on Earth might not be so happy ever after. Walt Disney Co. reported a 32% decline in quarterly profits and missed targets today. Disney said it’s tough times in the recession: Disney movie studio lost 26% in revenue due to a weak lineup of home video’s. CEO Robert Iger blamed their losses on an increasing ability of consumers to access videos online. As business’s like Netflix have made watching movies more accessible, people are able to more selective with the little time they have. Iger pointed out that he doesn’t think the state of the economy attributed to the changes in Disney but rather some other aspect that influenced consumer behavior that they plan to address as soon as possible.

I decided to check Walt Disney Co. on PredictWallStreet. The ticker symbol is DIS. It was interesting to see the poll results. 63% of predictors had predicted up on Disney today. Looking at sentiment and then the 1 month chart, sentiment appears to be heading upwards and almost becoming bullish. The Accuracy tab shows me the Star performers. Even more interestingly the most accurate predictor who is rated 5-stars predicted up today as well as the other 3 and 2 star predictors. So it looks as if all indicators are saying that DIS will close up. I am confused by this because well, didn’t they just report bad news? Didn’t they just report they lost 32% in quarterly profits? And while I agree with Iger to some point that they have issues to address regarding consumer behavior, I think its almost negligent for him to say the economy hasn’t attributed to these changes. In case you haven’t noticed, EVERYONE has been effected by the economy and your Disney magic is of no use here. Sorry, Mickey. If anyone can shed some light onto this situation and why sentiment is the way it is, that would be great! Perhaps such feelings just haven’t been reflected in price and sentiment quite yet…

In other news, UPS jumped today as its shares closed at 45.57. The company reported a a profit of 83 cents per share in its fourth quarter. It barely missed analysts estimates which were 85 cents per share. UPS plans to cut costs by freezing management salaries and spending its 401(k) program. Those seem like some pretty drastic measures that I’m sure employees are not too happy about but companies must cut costs where they can right now. Sentiment for UPS is on its way up into the bullish territory as investors most likely become more optimistic after it announced it’s cost cutting plans. The PredictWallStreet poll shows 70% of predictors predicted up for UPS today. I remain bullish on them as they were extremely close to their estimates and are moving in the right direction to meet them next quarter.

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