LOS ANGELES (Reuters) - Wall Street expects two new princesses and a muscular Marvel superhero to help lift Walt Disney Co's quarterly results, as the company reaps the benefits of strong performances from film sequel "Thor: The Dark World" and animated musical mega-hit "Frozen."
On Wednesday, the media and theme park operator is forecast to report $1.6 billion in net income for the December quarter, a 14 percent gain from a year earlier, according to the average estimate of analysts polled by Thomson Reuters I/B/E/S. They expect earnings of 91 cents a share.
Disney's movie studio helped boost the results, analysts said, with big box office grosses for "Frozen" and "Thor."
The story of royal sisters in an icy kingdom, "Frozen" is the fourth-highest grossing animated film released by Disney, so far collecting $868 million worldwide.
"It is just blowing everyone away with how successful it is, how popular it is and how profitable we think it will be," said FBR Capital Markets & Co analyst Barton Crockett, who rates Disney "outperform."
Crockett on January 29 increased his Disney earnings estimate for the December quarter by 6 cents to 91 cents per share, partly due to the unexpected strength of "Frozen." Before it opened in November, he expected the film would gross about $200 million. He now expects it will approach $1 billion.
Cowen & Co analyst Doug Creutz raised his quarterly revenue estimates for Disney last week by $180 million to $12.54 billion, primarily on higher estimates for the movie division. He forecasts the studio will generate $362 million in operating income this quarter, up 55 percent from $234 million a year ago.
"Thor: The Dark World," a Marvel sequel about the god of thunder, has sold $635 million worth of tickets worldwide. With "Frozen," the two have surpassed a combined $1.5 billion.
CONSEQUENCES OF NEW STRATEGY
Disney's latest crop of films followed an overhaul that Chief Executive Bob Iger ordered in 2010. The studio began focusing on a smaller number of films from the Disney, Pixar and Marvel brands that had the potential to become franchises that bring in box office receipts, spawn movie sequels, drive toy sales and inspire theme-park rides.
In 2013, Disney's movies collected $1.7 billion worth of tickets at U.S. and Canadian theaters, just behind the $1.9 billion for industry leader Warner Bros., according to Box Office Mojo. Disney's returns came from 17 films, half as many as the 34 for Warner Bros., a unit of Time Warner Inc.
Disney released three of last year's top six films. "Iron Man 3" was the year's second-bestselling film, with $409 million. Number four, "Frozen" has sold nearly $359 million in the United States. "Monsters University" was sixth with $268 million.
"Frozen" also marked the reemergence of Walt Disney Animation Studios, the company's traditional animation arm that had fallen behind the films produced by the company's Pixar unit, which Iger acquired in 2006 for $7.4 billion.
Disney's studio also aggressively used characters from Marvel, the comic book and toy company it acquired in 2009 for $4 billion. It bought back the rights to "Iron Man" and "Thor" from Viacom's Paramount studio.
Marvel helped the company make good on Iger's pledge to make films from which Disney could produce TV shows, sell toys and create rides. It created the TV show "Agents of S.H.I.E.L.D." for ABC based on its 2012 blockbuster "Marvel's The Avengers," the industry's third-largest film with $1.5 billion in worldwide ticket sales.
But focusing on a smaller number of larger-budget flicks has a clear downside. The company produced a dud in big-budget Western "The Lone Ranger" starring Johnny Depp as sidekick Tonto. Disney said in August it would lose up to $190 million on the film.
With fewer films, "if they all hit, you are going to have great results," analyst Creutz said. "The problem is, if one of them misses, you don't have a lot of other places to make them up."
(Reporting by Lisa Richwine; Editing by Cynthia Osterman)