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Wednesday April 23, 2014



Walt Disney Reports Second Quarter Results

The Walt Disney Company (DIS) reported its second quarter earnings on May 7.

Disney reported quarterly revenue of $10.55 billion. This represents an increase of 10% from the same period last year when the company reported revenue of $9.63 billion. The company reported net income of $1.51 billion for the quarter. This represents an increase of 32% from the same period last year when the company reported net income of $1.14 billion.

The company credited some of its successful second quarter results to strong world-wide performances from hit films Oz The Great And Powerful and Wreck-it Ralph, both of which performed better than the box office disappointment John Carter during the same period last year.

"With adjusted earnings per share up 36% over last year, we're obviously pleased with our second quarter," said Robert A. Iger, Chairman and CEO of The Walt Disney Company. "Our results reflect our successful strategy, the strength of our brands and the value of our high-quality creative content, all of which continue to drive long-term growth and shareholder value."

The Walt Disney Company (DIS) shares ended the week at $67.18.

News Corp. Reports Third Quarter Results

News Corporation (NWS), a multinational media corporation, announced its third quarter results on May 8.

The company reported third quarter revenue of $9.54 billion, a 14% increase over the $8.40 billion the company reported during the same period last year. The company reported that 55% of the revenue increase reflected growth at its Cable Network Programming.

News Corp. also reported third quarter segment operating income of $1.36 billion, an increase over the $1.31 billion reported during the same period last year. The improvement came primarily from the company's Cable Network Programming, Filmed Entertainment and Television segments.

Rupert Murdoch, Chairman and CEO, commented on the results: "In our fiscal third quarter News Corp. achieved organic growth across our cable, film and television segments and, through the consolidation of Sky Deutschland and sale of stakes in SKY New Zealand and Phoenix Satellite Television, we advanced our strategic agenda to simplify our global portfolio. We also announced our plans to broaden our core cable business with the unveiling of our national sports channel Fox Sports 1 and our third branded FX channel, FXX. Both initiatives underscore our strategy of maximizing existing assets and leadership positions to drive sustainable growth and long-term value.

He concluded: "We are on target to complete the proposed separation of our businesses near the end of our fiscal year. As we prepare to launch two new industry leaders with new News Corporation and 21st Century Fox, I am more confident than ever of the long-term value the separation will unlock for the Company and its shareholders."

News Corporation (NWS) shares ended the week at $33.27.

Activision Blizzard Announces First Quarter Results

Activision Blizzard (ATVI), the world's second-largest gaming company, announced its first quarter results on May 8.

The company reported GAAP net revenue of $1.32 billion for the quarter, which represented an increase over the $1.17 billion reported during the same period last year. On a non-GAAP basis, the company reported net revenue of $804 million for the quarter, an increase over the $587 million reported during the same period last year.

Activision Blizzard's earnings per diluted share were $0.40 for the quarter compared to $0.33 for the first quarter of 2012. On a non-GAAP basis, earnings per diluted share were $0.17 compared to $0.06 for the first quarter of 2012.

Bobby Kotick, CEO of Activision Blizzard, said, "Our first-quarter performance was driven by continued consumer interest in all of our key franchises. Blizzard Entertainment's StarCraft II: Heart of the Swarm was the #1 PC game for the quarter. Additionally, during the quarter, Blizzard's World of Warcraft remained the #1 subscription-based MMORPG in the world with more than eight million subscribers, although the game saw declines of approximately 1.3 million subscribers, mainly from the East, but in the West as well."

Activision Blizzard is the publisher of many of the most well-known brands in the gaming industry, including the Call of Duty, Guitar Hero, Warcraft and Diablo series.

Activision Blizzard (ATVI) shares ended the week at $14.95.

The Dow started the week at 14,974 and closed at 15,118. The S&P 500 started the week at 1,614 and closed at 1,634. The NASDAQ started the week at 3,379 and closed at 3,437.

Treasuries Fall as the Yen Weakens

Treasuries fell and yields rose last week on signs of an improving U.S. economy and a weakening Japanese yen. Because the Fed and other central banks are pouring money into their economies or cutting interest rates, money managers and investors are seeking higher-yielding assets compared to Treasuries.

During early Friday trading, the benchmark 10-year note yields rose 3.5 basis points to 1.847%.Yields on the 30-year bond also rose 3.5 basis points to 3.047% while the 5-year note rose 2.5 basis points to 0.779%.

Yesterday the dollar's exchange rate against the yen reached 100, an exchange-rate threshold traders had been hoping for ever since the Bank of Japan announced its easing policies. Once the threshold was reached, the yen continued to weaken with the dollar trading at 101.61 yen last Friday morning. This weakening of the yen caused it to depreciate to its lowest level since October 2008.

"There was a huge move in Japanese government bonds and also in stocks and the dollar-yen," said John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London. "Yields are going to push higher in coming months as there isn't that sense of urgency that pushed them toward record lows."

Government bonds in Japan, Germany and the U.K. all slumped last week, with the weakening yen impacting 10-year German government bonds. The German bonds, known as Bunds, were up 1.5 basis points last Friday to 1.33%.

"The selloff in the yen accelerated in Europe, driving Treasuries lower still," said John Canavan, fixed-income analyst at Stone & McCarthy Research Associates. "Bunds also broke through key technical levels, and the ensuing breakdown in Bunds weighed on Treasuries, although power-reverse-dual-currency-related selling reportedly dried up."

The 10-year Treasury note yield finished the week at 1.90% while the 30-year Treasury note yield finished the week at 3.10%.

Interest Rates Rise for First Time in Six Weeks

Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) on May 9. The results show average fixed mortgage rates moving higher for the first time in six weeks upon last week's news of a better than expected April employment report.

The 30-year fixed rate mortgage averaged 3.42% this week. This represents an increase from last week when it averaged 3.35%. One year ago at this time, the 30-year fixed rate mortgage averaged 3.83%.

The 15-year fixed rate mortgage averaged 2.61% this week. This represents an increase from last week when it averaged 2.56%. Last year at this time, the 15-year fixed rate mortgage averaged 3.05%.

"Fixed mortgage rates edged up following a solid employment report for April," said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. "The economy gained 165,000 new jobs on net last month, more than the market consensus forecast and the largest monthly increase this year. On top of that, revisions added 114,000 more jobs to February and March as well. All of these factors allowed the unemployment rate to fall to 7.5% in April, the lowest since December 2008."

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

Published May 10, 2013

Previous Articles

DreamWorks Animation Reports Quarterly Earnings

Apple Reports Second Quarter Results

Google Reports Quarterly Earnings

Bed Bath & Beyond Reports Fiscal 2012 Results

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