General Profits

The Walt Disney Company (NYSE: DIS) has entered a period of massive change, but it’s likely to come out the other side in better shape than it’s currently in. Sales have been flat over the past few quarters, and many worry about Disney’s long-term health because of the spread of cord-cutting, where consumers drop cable TV service for streaming alternatives. That’s bad for Disney’s ESPN, which charges cable networks more than any other channel to carry it — but Disney has responded with plans to start two streaming services, one focused on sports, and the other on family, Marvel, Pixar and “Star Wars” content. Disney has an unequaled treasure trove of content it can mine. Much of Disney’s business remains strong. Its parks and resorts, for example, could easily set another earnings record in fiscal 2018 as Disney’s Shanghai resort starts kicking in significant profits. In 2019, Disney also has theme park expansions planned to open both in California and Florida based on “Star Wars.” Those openings, plus some improvements at Florida’s EPCOT and Toy Story Land opening at Disney Hollywood Studios, should drive much traffic. The media giant’s pipeline of movie releases is stacked, too. There are several pictures on the way from Marvel studios next year and many more releases under the Pixar, Disney and Disney Animation brands. (The Motley Fool owns shares of and has recommended Disney.)