Who Needs Discounts - 26% Increase in Operating Income for Disney Parks in FY 2012

[jcb]

Disney has just released its 2nd quarter earnings for FY 2012. I won't say too much about it now (I'm waiting on the conference call) but revenue and "operating income" (net earnings) are up significantly, but note that these do not break out revenue/net earnings domestically and internationally.

Parks and Resorts revenues for the quarter increased 10% to $2.9 billion and segment operating income increased 53% to $222 million. Results for the quarter were driven by increases at our domestic parks and resorts, Tokyo Disney Resort and Hong Kong Disneyland Resort, partially offset by a decrease at Disneyland Paris.
Higher operating income at our domestic parks and resorts was driven by
increased guest spending and attendance, partially offset by increased costs.
Increased guest spending reflected higher average ticket prices, daily hotel room rates and food, beverage and merchandise spending. Higher costs were driven by labor cost inflation, resort expansion and new guest offerings, volume-related cost increases, and increased investments in systems infrastructure. The increase at Tokyo Disney Resort reflected the loss of income in the prior year quarter from the March 2011 earthquake and tsunami in Japan, which resulted in a temporary suspension of operations, and the collection of related business interruption insurance proceeds in the current-year quarter. The increase at Hong Kong Disneyland Resort was due to higher guest spending and attendance. The decrease at Disneyland Paris was due to lower attendance and labor cost inflation.

 

[jcb]

Bob Iger starts the earnings call talking about Avengers - which opened a month after Q2 ended. Given the John Carter disaster, I would have done the same.

And in news that will shock no one, he confirms there will be a sequel.

 

[jcb]

Iger: Fantasy and Dream extremely popular with strong bookings.

Remember that Disney's Parks and Resorts segment includes the cruise ships. With winter sailings so popular, this likely helps to offset a slower time in the parks.

 

[jcb]

Jay Rasulo mentions John Carter in passing. It was an "impairment."

 

[WebmasterMike]

Jay Rasulo mentions John Carter in passing. It was an "impairment."

Impairment, LOL. Nice!

Operating income is up, but what is their EBITDA?

 

[jcb]

Impairment, LOL. Nice!

Operating income is up, but what is their EBITDA?

They don't say, using GAAP, instead.

 

[jcb]

Jason Garcia has written an informative article on Disney's Q2 earnings and the comments made in this afternoon's earnings call.

A couple of other points, he didn't make. While Iger wouldn't commit to additional hotel rooms at Disneyland, he didn't rule it out, either. He stressed that when the current expansions are completed, investors should look for the company to be "prudent" in further capital expenditures. I find myself wondering whether he thinks Carsland or Fantasyland expansion imprudent but this is the kind of double-speak you get in earnings calls (see above post about John Carter).

The article notes domestic attendance is flat for the quarter. Rasulo also explained that this applies to out of state Disneyland attendance but that they are also seeing a big pickup in resident attendance and a strong demand for annual passes to DL. I attribute this to Tom's Tea Cup Challenge.

 

[GAN]

All interesting ...hey, the stock has been a bullet the last few months

 

[dalt01]

Bob Iger starts the earnings call talking about Avengers - which opened a month after Q2 ended. Given the John Carter disaster, I would have done the same.

And in news that will shock no one, he confirms there will be a sequel.

with Buena Vista as distributer and Marvel Productions as main production co., Paramount is also in there, they most likely saw black at about 400 million, the rest is gravy. Carter almost covered, they were talking about writing it down about 250 million which i am sure they are creative enough to do, but i doubt it was actually that much. this is another juggernaut in the vein of Pirates..........we will be seeing much more of these fellows in colorful spandex and body armor for many years to come