Q1 OI misses but all eyes on DTC plans
Q1 revenue and operating income missed while EPS was ahead on tax. Parks and resorts was a standout with 21% growth while cable was also ahead but all other units missed. We would highlight a few key points: 1) Tax for 2019 onwards will be 21% vs. our 25% forecast, 2) Disney will boost Fox's content production facilities (not cut as some had thought) in order to compete globally with Netflix, 3) Disney's entertainment DTC offering does not need to be as broad as Netflix's as it has better brands, 4) Disney has signed up Game of Thrones writers/producers Benioff and Weiss to develop a new Star Wars trilogy, 5) ESPN ad trends are weak but sub losses improved marginally and 6) the ESPN DTC seemed underwhelming. Overall, we remain Neutral and see Fox as the better opportunity of the two merger partners.Diskus Werke Fankfurt am Main is a holding company. Co. through its subsidiaries is a producer of grinding machines and grinding material for industrial use.
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