Walt Disney (DIS) Tanks While Electronic Arts (EA) Surges As Latest Earnings Reports Trigger Mixed Reactions

Disappointing earnings have pushed US stocks lower this morning, but the decline did not last long. The EIA’s weekly inventory has shown a reduction in crude stocks, pushing oil prices higher, which in turn gave a boost to the stock market. In this article we’ll take a look at how investors reacted to the earnings reports of several noteworthy companies: Walt Disney Co (NYSE:DIS), Wendys Co (NASDAQ:WEN), Macy’s, Inc. (NYSE:M), Blue Buffalo Pet Products Inc (NASDAQ:BUFF) and Electronic Arts Inc. (NASDAQ:EA).

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Walt Disney Co (NYSE:DIS) shares are tanking today after the company reported fiscal second-quarter results that missed expectations. Despite a string of huge box office successes, Disney saw weakening growth in its media networks and theme park businesses. As it reported earnings of $1.36 per share, the company missed analysts’ projections for the first time in five years, with the consensus being at $1.40 per share. Revenues of $12.97 billion also fell short of expectations, as market participants were looking for $13.19 billion. Media networks’ sales came in at $5.79 billion, pretty much flat year-over-year, while revenues from the parks and resorts business stood at $3.93 billion, below estimates of $4.03 billion. The film unit was the star player, as sales grew 22% year over year to $2.06 billion. Billionaire Ken Fisher is a fan of this stock, with his fund, Fisher Asset Management, having reported a 1% increase in its holding to 8.64 million shares held at the end of the first quarter. The value of this position was estimates at more than $852 million.

Shares of burger chain Wendys Co (NASDAQ:WEN) are down today, despite an upbeat earnings report. The numbers released this morning easily beat analysts estimates, with revenues coming in at $378.8 million and earnings at $0.11 per share when adjusted for one time costs. The consensus among analysts was $350.8 million in revenues and a profit of $0.06 per share. It seems that market participants paid more attention to growth figures where Wendys’ weakness currently lies. Compared to the same period of last year, revenues fell by 16%, while net income dropped by roughly 7.5%. As a result, the stock plunged this morning and is currently down by 6.8% from yesterday’s closing price of $11.18. Murray Stahl‘s Horizon Asset Management continued to reduce its stake in Wendys Co (NASDAQ:WEN), with the latest 13F filing showing a 13% decrease in its holding to 13.5 million shares worth $147.3 million at the end of March.

On the next page we’ll take a look at the numbers released by the remaining three companies.

Macy’s, Inc. (NYSE:M)’s stock has slid by 13%, after the company slashed its outlook for the year. The largest US department store released first quarter results this morning, managing to beat earnings estimates. Macy’s reported a profit of $0.40 per share on $5.77 billion in revenues, down by 7.5% year over year, while analysts were expecting revenues of $5.95 billion and earnings of $0.35 per share. Because of a significant decrease in mall traffic, the company decided to revise its forward guidance, lowering its profit estimates to a range of $3.15 to $3.40 for the full year from previous estimates of $3.80 to $3.90 a share. Macy’s also said it witnessed a drop in sales of some core categories and that tourist spending dropped significantly due to the strong dollar. Hedge fund interest in Macy’s, Inc. (NYSE:M) dropped significantly over the fourth quarter of 2015, with the number of long hedge fund positions reduced to 51 from 67 reported a quarter before. Together, these funds held approximately 10.5% of the company’s common stock.

It’s all smiles for shareholders of Blue Buffalo Pet Products Inc (NASDAQ:BUFF) this morning, as the company beat Wall Street’s estimates for the first quarter and issued full year guidance in line with analysts’ forecasts. The pet food producer posted a profit of $0.19 per share, above the consensus of $0.18 per share, while revenues came in at $279.8 million, also surpassing the Street’s expectations of $275.6 million. For the full year, Blue Buffalo Pet Products said it expects earnings in the range of $0.73 to $0.74 per share and revenues of $1.13 billion to $1.14 billion. Shares opened higher this morning and are up by 9.7% at the time of this writing. So far this year, the stock has been in a solid uptrend, having gained roughly 30% before the release of the earnings report. At the end of the 2015 fourth quarter, only 16 of the funds followed by Insider Monkey reported a stake in Blue Buffalo Pet Products Inc (NASDAQ:BUFF), down from 24 at the end of the third quarter. Their combined holdings amounted to just 4.9% of the company’s outstanding stock.

Electronic Arts Inc. (NASDAQ:EA) rode the wave of the Star Wars smashing success, which is reflected in the company’s latest quarterly report. The gaming and content company said it saw a 65% surge in unique players on EA Sports titles and a significant increase in the Star Wars players base. Fiscal fourth-quarter revenue stood at $924 million, up by 3% year-over-year and above analysts’ forecasts of $889 million. Electronic Arts also posted a net profit of $899 million or $0.50 per share when adjusted for one time gains and costs, also surpassing Wall Street’s expectations of $0.42 per share. “We grew non-GAAP net revenue, profitability and cash flow to record highs. Leveraging our great portfolio of brands and live services has enabled us to break records across our key financial metrics,” said Blake Jorgensen, CFO of Electronic Arts. Shares are currently trading up by 12% from yesterday’s closing price. At the end of the fourth quarter, Stephen Mandel‘s Lone Pine Capital held the largest stake among the funds tracked by Insider Monkey: 6.44 million shares, down by 27% over the quarter.

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