The Force awakens for Disney

Cinema’s brand №1 returns. The force will awaken with the seventh episode of Star Wars. The premierе is on December 18, 2015 and beside cash records that will probably come after so many years of waiting, the industry has turned the popular brand in profit machine. The Walt Disney Company (DIS: XNYS) is only one of the companies that are on the crest of a wave and will benefit from the new project.
Online sales of toys in the United States reached a 12-month high of 17.7 mln US dollars in September, which is 7 times more than in September 2014. Hasbro (HAS: XNAS) has exclusive rights for the sale of toys by paying 225 mln US dollars for licenses to Disney.

What we know so far

In 2005 it looked like the Star Wars saga was officially over. Lucasfilm and Twentieth Century Fox released Star Wars Episode III: Revenge of the Sith, which completed the prequels trilogy and tied the story back to the first film in the series. It was done, finished, kaput, and ended. 
But then along came Disney. In October 2012 the studio brokered a $4.05 billion deal to buy Lucasfilm, and with the deal came the announcement that they would be starting production on a whole new trilogy of Star Wars films that would keep the epic story going for years and years to come. Naturally,fan boys started to foam at the mouth with anticipation.

Disney’s shares

The previous episode of Star Wars - Episode III: Revenge of the Sith - had a budget of 115 mln US dollars. It brought revenues of nearly 849 mln US dollars. And this does not include revenues from the sales of DVD, computer games, toys, etc. The overall amount of incomes is about 33 billion US dollars. At the end of October 2012 Lukasfilm was acquired by Disney for 4 billion US dollars. Then the rumours about the new three films started.

Since the beginning of 2015 Disney's shares are up by 23%, presenting much better than S&P 500, which recorded only 2% growth for the same period.

Disney's share price 2013-2015. Source: Bloomberg

This increase is not accidental. Company’s earnings increased by 32% for the third quarter on an annual basis, which significantly exceeds the average for S&P 500. And earnings per share is up by 36%. So the trend of strong growth from the last two years retains.

And this is expected to continue. But let’s see what exactly will bring the saga!