Higher profit seen at Disney in 2012

CHICAGO (MarketWatch) ' Walt Disney Co. is expected to post higher profit for the quarter ended Dec. 31, though difficult comparisons with very strong results at ESPN and in home video in the year-earlier period could have an impact.

Disney DIS 'is expected to post a fiscal first-quarter profit of 75 cents a share, excluding stock-option payments, on revenue of $11.19 billion, according to a consensus poll of analysts by Thomson Reuters.

In the same period a year earlier, the company earned 68 cents a share on revenue of $10.7 billion.

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Jeffrey Thomson of Hilliard Lyons said late last year that Disney's December quarter 'is likely to produce the smallest year-over-year increase' of fiscal 2012, 'due in part to a tough comparison to the year-ago quarter ' a period that included considerable growth at ESPN and benefits of robust DVD sales of 'Toy Story 3.''

Across the media and entertainment industries, there is optimism about the advertising market, especially in television, which has held most of its appeal for advertisers as one of the few remaining ways to reach mass audiences.

Ad sales and rates are expected to once again be strong at ESPN, where! NBA gam es, college basketball and various shows around the NFL have led to solid ratings gains, but Disney Chief Executive Bob Iger warned in November that comparisons with the fiscal fourth quarter of 2010 would be difficult.

At ABC, the network's situation comedies have received solid ratings, though it ranks third among the Big Four networks among adults 18 to 49 years old ' the group most desired by advertisers because of its apparent willingness to switch brands.

Analysts will look forward to getting more insights from Iger on the online-video model and its potential effect on traditional TV. Comcast Corp. CMCSA 'and Disney unveiled a 10-year deal last month that will make Disney shows available on a wide variety of Comcast platforms, including regular TV, video-on-demand, phones and tablets. Under the deal, Comcast customers can watch Disney shows online that can't otherwise be viewed on the Web.

Disney executives will probably also be asked what last month's Italian cruise-ship tragedy could mean for its own cruise ships. The Carnival Cruise-owned Costa Concordia foundered off the coast of Italy, killing at least 16, and observers fear that the incident could be a concern to would-be passengers in the near term.

Disney recently launched its third ship, the Disney Dream, and some analysts speculated that a fourth could be launched in fiscal 2012.

There's plenty of chefs in the public offering kitchen

The IPO process is extremely complex. A company must abide by onerous�regulations, such as the Securities Act of 1934 and the Sarbanes-Oxley Act. As a result, even top-notch companies can have problems somewhere down the line. Google (NASDAQ:GOOG), Salesforce.com (NYSE:CRM), Groupon (NASDAQ:GRPN) and Zynga (NASDAQ:ZNGA) all faced missteps along the way.

To deal with the complexities, a company must hire a variety of top-notch advisers. Not to mention, businesses also have to get funding from private investors. By the time a company goes public, a ton of people have had their hands in the mix in one way or another. To sort it all out, let’s take a look at the main players in an IPO:
Venture Capitalists

Venture capitalists (also just called VCs) are people or firms that invest in early-stage companies. The funding amounts can range from $1 million to $100 million or more.

A VC often will have a board seat to take an active role with a company. This can include finding top employees, snagging customers and even making acquisitions.

For VCs, it’s usually just a handful of deals that will generate strong returns, as the risks are substantial for start-up companies. But in some cases, the returns can be enormous. An example is Accel Partners, which invested $12.7 million in Facebook in 2005 — and could see a return of more than $11 billion once the company goes public.

Some of the top VCs in the game include Andreessen Horowitz, Sequoia Capital, Accel, Benchmark Capital, NEA, Kleiner Perkins and Greylock Partners.

See Also: 4 Reasons Companies Go Public
Investment Bank

An inve stment bank (also known as an underwriter) is a Wall Street firm such as Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan (NYSE:JPM) that essentially manages the whole IPO process. This means drafting the necessary documents, coming up with a valuation, finding the right investors and conducting the road show.

For its services, an investment bank will be paid based on the amount of money raised. This usually amounts to a percentage ranging between 2% and 7%.
Attorneys

Companies usually will have in-house counsel, as well as an outside firm that will handle SEC disclosures. Both groups will help put in better check systems and engage in “corporate cleanup,” which means making adjustments to contracts and so on.

Some of the top IPO law firms include Wilson Sonsini Goodrich & Rosati, Latham & Watkins, O’Melveny & Myers, Shearman & Sterling and Sullivan & Cromwell.

See Also: How an IPO Works
Auditors

A company will have an internal auditor and an external auditor. They will focus on making sure a company’s financials are in compliance with generally accepted accounting principles (GAAP). The external auditor then will write a “comfort letter” that vouches for the financials.

Having a well-known auditor is extremely important, especially considering the kind of damage an accounting scandal can do. Top auditors include PricewaterhouseCoopers, KPMG and Deloitte & Touche.
Public Relations Firm

When a company is in the IPO process, it must abide by the “quiet period.” This means management and insiders are limited in what they can say to the media, as to not hype the offering.

No doubt, this isn’t a f! un task for public relations firms, which traditionally want to increase their clients’ visibility. But experienced PR firms will know how to play within the rules while still keeping the lines of communication open.
Financial Printer

It seems archaic, but a company must print all its SEC filings. This can be a hassle, as S-1 filings can easily be several hundred pages. And speed is important, as an IPO filing often must be turned around to the SEC within 24 hours.

One of the top names in financial printing is R.R. Donnelley & Sons (NASDAQ:RRD), which acquired longtime printer Bowne & Co. in 2010.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of �The Complete M&A Handbook”, �All About Short Selling� and �All About Commodities.� Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.