Finances

Walt Disney Company (DIS), an international provider of media entertainment and theme parks, announced its quarterly and annual earnings on November 8.

The company reported fourth quarter revenue of $10.78 billion and annual revenue of $42.28 billion. The company's fourth quarter revenue represents an increase from the same period last year when it reported revenue of $10.43 billion. Its annual revenue also represents an increase from last year's total of $40.893 billion.

Disney reported net income of $1.24 billion and $5.68 billion for the quarter and the year, respectively. Both figures represent an improvement from last year when Disney reported fourth quarter and annual net income of $1.09 billion and $4.81 billion, respectively.

Disney's Chairman and CEO Robert Iger, said: "Fiscal 2012 was a great year creatively, financially and strategically, resulting in record revenue, net income, and earnings per share. The addition of Lucasfilm will further fuel Disney's creative engine across our company to create additional value for our shareholders and we're confident the Company is well positioned to continue our strong performance and growth."

Walt Disney Company is the largest media conglomerate in the world when measured in terms of total revenue. In the past few years the company has made several acquisitions, including Lucasfilm and Marvel Studios. The wildly successful film The Avengers was released by Marvel Studios this past summer.

Walt Disney Company (DIS) shares ended the week at $47.06.

Time Warner Reports Quarterly Earnings

Time Warner, Inc. (TWX), the second-largest media conglomerate in the world, reported its third quarter earnings on November 7.

The company reported third quarter revenue of $6.8 billion. This figure represents a 3% decrease from the same period last year when the company reported quarterly revenue of $7.1 billon.

Time Warner also reported net income of $838 million for the quarter. This represents an increase from the same period last year when the company reported net income of $822 million.

"With one quarter left to go in 2012, we're on track for another very strong year. The highlight this quarter was the strength of our Networks businesses, which delivered double digit Adjusted Operating Income growth. This performance illustrates that our investments in content and technology are continuing to pay off," said Jeff Bewkes, Chairman and CEO. "We're experiencing good momentum across most of Turner's networks. TBS, for instance, was up 35% in primetime for adults 18-49 this quarter and is now the #1 network on cable this year for adults 18-34. At HBO, the unmatched volume of its quality original programming was underscored by the 23 Primetime Emmy awards HBO received this year–more than any other network for the eleventh consecutive year. With compelling content, technological innovations like HBO GO and support from our affiliates, the subscriber trends at HBO today are the best they've been in years."

Time Warner, Inc. has found great success in recent years, producing such theatrical successes as the Harry Potter and Batman series of films. Likewise, the company has also found success on the small screen with the commercial and critical success of such hits as HBO's Game of Thrones and TNT's The Closer.

Time Warner, Inc. (TWX) shares ended the week at $44.67.

Still Cookin', Wendy's Reports Quarterly Earnings

The Wendy's Company (WEN), an international seller of so-called "old fashioned hamburgers," announced its third quarter results on November 8.

Wendy's reported quarterly revenue of $636.3 million, an increase of 4.1% over the same period last year when the company reported third quarter revenue of $611.4 million.

The company reported a net loss for the quarter of $26.7 million, due in part to a $49.9 million pretax charge for the early retirement of debt. This loss compares unfavorably to the $2.5 million of net income the company reported in the third quarter of 2011.

"Our top-line momentum continues as we generated our sixth consecutive quarter of same-store sales growth, including a two-year same-store sales increase of 4.5%, in the third quarter," President and Chief Executive Officer Emil Brolick said. "Our focus on operational levers such as menu innovation and improved marketing are reinvigorating the brand. We are excited about our progress with Image Activation, which is an important element of our 'Recipe to Win' growth strategy. Average annualized sales volumes for the restaurants we reimaged during 2011 have increased more than 25%, and we remain on track to reimage 50% of our Company-operated restaurants by the end of 2015."

The Wendy's Company opened its first restaurant in Columbus, Ohio in 1969. The company is famous for making its "old fashioned hamburgers" with fresh ground beef instead of frozen patties.

The Wendy's Company (WEN) shares ended the week at $4.45.

The Dow started the week at 13,093 and closed at 12,815. The S&P 500 started the week at 1,414 and ended at 1,380. The NASDAQ started the week at 2,982 and finished at 2,905.

Treasuries rose this week following the re-election of President Barack Obama and a divided Congress, spurred by concerns that legislators will be unable to reach an agreement and avoid the upcoming "fiscal cliff." The difference in yields between the 10 and 30-year debt narrowed to the smallest margin since August. Meanwhile, the demand for bonds reached its highest level since December 2011.

Priya Misra is head of U.S. rates strategy at Bank of America in New York, one of the Federal Reserve's 21 primary dealers. Ms. Misra said, "The strong auction reflects strong demand. If you are worried about the fiscal cliff, the place to be is the long end of the Treasury curve, as the yield there has more room to fall." The yield on the current 30-year bond fell to its lowest level since September 7 on Thursday, November 8, when it fell 0.08% to 2.75%.

Unless Congress and the President take action to address the country's deficit and fiscal situation, the U.S. will incur $1.2 trillion in mandated spending cuts and tax increases starting January 1. The Congressional Budget Office has stated that these actions would slow the U.S. economy by as much as 0.5% next year. The recent election has only fueled the fears of experts and financial analysts that U.S. fiscal policy makers will have difficulty reaching the consensus required in order to solve the nation's fiscal situation.

In a report on November 8, Standard and Poor's stated that the probability that political gridlock will push the U.S. over the fiscal cliff has increased to 15%. S&P said, "Our best-case forecast has long been for Congress to resolve the fiscal cliff after the election and before the end of the year. Law makers will finally come to realize that they must reach some compromise on tackling the long-term federal debt, phasing in spending cuts and tax increases over several years."

The 10-year Treasury note yield finished the week at 1.61% while the 30-year Treasury note yield finished the week at 2.75%.

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on November 8. The results showed that average fixed mortgage rates continue to remain near record lows, with the 30-year fixed rate remaining below a historically low 4% threshold.

The 30-year FRM averaged 3.40% this week. That represents an increase from last week when it averaged 3.39%. Last year at this time, the 30-year FRM averaged 3.99%.

The 15-year FRM averaged 2.69% this week. This represents a decrease from last week when it averaged 2.70%. One year ago, the 15-year FRM averaged 3.30%

Frank Nothaft, Vice President and Chief Economist at Freddie Mac, said, "Mortgage rates remained near record lows following the employment report for October. The economy added 171,000 jobs, above the market consensus forecast, and the two prior months were revised up a combined 84,000. The Labor Department also reported that the unemployment rate ticked up to 7.9% and that average hourly wages were unchanged."

The money market fund finished this week at 0.5%. The 1-year CD finished at 0.7%.