Disney Company Performance


#1

I wonder if Disney will re-think its aggressive expansion of DVC or its constant price increases for park tickets etc, given this news:

Disney profit sinks 7%
November 11, 2010|By Jason Garcia, Orlando Sentinel

JACOB LANGSTON, ORLANDO SENTINEL:
Walt Disney Co. profit sank 7 percent during the final three months of its fiscal year, disappointing Wall Street as one-time adjustments dragged down the company’s television networks and theme parks and more than offset gains from the blockbuster movie “Toy Story 3.”

Business remained soft at Walt Disney World during the July-through-September period, though the company said the resort’s fall bookings are beginning to pick up.

“Overall, we’re encouraged by many of the trends we’re seeing in our businesses,” Disney Co. Chief Financial Officer Jay Rasulo said during a Thursday afternoon conference call with analysts.

Disney made $835 million during the quarter, which ended Oct. 2, down from $895 million last year. Revenue dipped 1 percent to $9.7 billion.

The results were hampered by the timing of certain revenue at the ESPN cable-TV network and a quirk in the company’s accounting calendar that left this year’s fiscal fourth quarter with one less week than last year’s fourth quarter.

Disney’s full-year profit leapt 20 percent to just under $4 billion on revenue that was up 5 percent to $38.1 billion, thanks in large part to continuing advertising and affiliate-fee gains at ESPN and a slate of hit films that included “Toy Story 3,” “Alice in Wonderland” and Marvel Entertainment’s “Iron Man 2.”

Disney President and Chief Executive Officer Bob Iger called the year “a good one financially and strategically for our company.”

It was another difficult one, however, for the company’s theme-park unit. Operating income at Walt Disney Parks and Resorts fell 7 percent for the year, to $1.3 billion — the only one of Disney’s five main segments in which profit fell. Sales inched up 1 percent to $10.8 billion.

That annual performance included a fourth quarter in which operating profit sank 8 percent to $316 million on revenue of $2.8 billion, down 1 percent from a year earlier. Disney blamed the shrunken quarterly profit on rising labor costs and pension obligations at Disney World and Disneyland, and on falling sales at Disney Vacation Club, its time-share arm.


#2

I still can’t understand about the operating income falling with the parks. Time and time again, I hear about how crowded the parks are at uncrowded times. I went in September, which in the past would be empty, and there were lines this time (not bad ones, but still longer than in the past). So what’s the deal. Are they discounting things too much? I don’t believe so comparing how much a family of four cost us 7 or 8 years ago compared to now. I’m sure there is underlining reasons, but I just don’t see it.


#3

one sneeky little reason might be the airlines and the baggage fees,less shopping,another could be dvc itself,much less profit,eating in your room than eating out,another could be customer base,repeat customers might tend to control spending better than newbies,and one final one sure to get everyone going,the growth of special events sure you get the bang from the added cost of admission,but the restaurants and stores have less people to sell things to,so total revenue,might actually be down during these events…and also the cast member requirements i believe are up ,so as to police the rides…for the arm bracelet…ah ha


#4

I would agree that disocunting is eroding their profit margins. However when you build a monster resort, you need to fill it to cover the fixed costs. This is true for any company.

I do think that costs outside of Disney’s control do hurt the company. Things like checked bag fees, etc. take disposable income out of the hands of visitors.


#5

The next time we go down to WDW we are thinking of driving. It around 900 miles but we are now retired and can take our time plus there are places we want to see along the way. We will spend our normal 7 days there then head back along the coast stopping in Charlestown, Hilton Head, Myrtle Beach, then Williamsburg. That should take us about another week to do, plus they are nice comfortable rides bwtween then. Problem is that now that we have the car with us, it will probably cost more due to the fact that the wife will probably do more shopping at WDW.


#6

That is a great plan. I wish I was retired! :wink:


#7

If you are taking time to hit Charleston and Hilton Head, take time to visit Beaufort also. HH is actually in Beaufort County. Lots of historic places to visit. Also think of Savannah, GA.