Is this a reason for Disney to worry?

[disneyseniors]

I think the poster meant in the aggregate.

Disney's stock was trading at $121/share in early August. Today the price is around $98. It's lost 20% of its value in under two months. That's a huge cause for concern.

yep, that's what I meant Thanks for clarifying! No, she is not a millionaire!!!!

 

[minnie-apple-mouse]

But even though it's the smallest piece of the pie, Theme Parks are still providing over $600 million in income each quarter.

Additionally I would point out that while it is true that Walt Disney Parks and Resorts did indeed post operating income of $922 million, Universal in the most recent quarter reported operating income for their theme parks of $354 million.

Puzzling no doubt.

 

[lockedoutlogic]

The only reason why Disney would care about Universal's growth is if their stock price is affected by their own park's lack of growth. The analysts look at Universal and say, "If they're putting up these growth numbers, why aren't you?" It isn't about absolute attendance, it's about growth. think that it's important to put everything in context. The fact is that Parks & Resorts are far, far more important to Disney than to Comcast/Universal from a financial point of view.

In the last quarter, Disney had $4.1 billion in operating income, and Parks & Resorts accounted for just over 22% ($922 million) of that income. Parks & Resorts is the second biggest Disney segment. Media Networks dwarfs Parks & Resorts, accounting for almost 60% (almost $2.4 billion) of Disney's income. For Disney, Media Networks primarily means ESPN. ESPN is in trouble right now, so the market is looking more to the Parks & Resorts segment to support the stock price. The fact is thanks to ESPN's issues, Parks & Resorts suddenly became far, far more important to Disney than it's been in at least 10 years, and probably closer to 15, because ESPN is beginning to tarnish.

Then we look at Comcast/NBC Universal. Last quarter their Operating Income was $8.313 billion. Over DOUBLE what Disney puts up. And why? Because in addition to the other things that Disney does, Comcast is also a cable provider. They are primarily a cable provider. Their cable operations account for almost 60% (nearly $5 billion) of their income. Unlike Disney, their second biggest segment isn't their Theme Parks segment, but rather their Cable Networks & Broadcast Television segments, which account for another 26% of their income. Theme Parks aren't even third...Filmed Entertainment is. Finally, their smallest segment is Theme Parks, accounting for merely 7% of their income. This is roughly equivalent (percentage wise) to what Consumer Products is to Disney from a financial point of view. But even though it's the smallest piece of the pie, Theme Parks are still providing over $600 million in income each quarter.

Theme Parks is a tiny segment in the Comcast world, yet Comcast's growth results in that segment are amazing. Disney is supposed to be the theme park expert, and this segment accounts for a huge chunk of their bottom line, and yet the income growth isn't there. I don't think that Disney is worried about Universal being a competitor in Orlando necessarily (yet) but I do think that right now Universal's results are embarrassing to Disney because from a financial point of view, Universal seems to be doing parks better than the theme park king of the world.

But for consumers this should be great news. If Universal is doing something that makes Disney look bad, and if investors are starting to pay attention, then Disney will, too.

Fantastic...and I wish this could be mandatory reading for anyone on the site...

Cancel that..."comprehension" should be required.

This is the underpin of many of my fears...that Disney is blind by either choice or convenience to a competitor with money and means cutting into their themepark lead that was about 40 years in the making.

Mine train and AstroTurf to book fireworks passes or sell dessert parties so you can "look up" isn't sustaining the momentum in the long term...maybe the short too.

Did I Mention the fireworks are 12
Years old? I digress...

 

[lockedoutlogic]

If Disney wasn't just a little bit concerned they would not be spending 3 billion dollars.

I'll wait to see if they state that they're spending 3 billion...then I'll wait longer to see what that buys...

With it be a rolls Royce or a 78 Datsun with new paint on it?

Credit being given where not due

TOTS

 

[minnie-apple-mouse]

I've been puzzling over this comment for awhile, since you seem to be highlighting that Disney's results include the resorts in with its theme parks. The two companies have their own names for each of their segments, and obviously Universal wouldn't include resorts in their since they don't own any the resort hotels, even in Orlando (Loews does). I'm wondering what the special significance is of that to you, because it's not readily apparent to me.

Here is where you reported it, appears readily apparent.

In the last quarter, Disney had $4.1 billion in operating income, and Parks & Resorts accounted for just over 22% ($922 million) of that income.

Then we look at Comcast/NBC Universal. Theme Parks are still providing over $600 million in income each quarter.

 

[DDLand]

Puzzling no doubt.

That $600 million in operating income number cannot be right. That would suggest pre tax profits of over 80% on their realized revenue of $700 million+. Impossible.

For comparison, Walt Disney Parks and Resorts had $4 billion+ in revenue.

 

[Planogirl]

I fully expect Universal to surpass at least DHS. If not, Disney is more brilliant that I ever realized. Or it's the multi-day passes. It's likely both.

I love it though. Universal is amazing and Disney likely will be in a few years.

 

[lockedoutlogic]

Here is where you reported it, appears readily apparent.

Even at a disparity of 922 to 600 each year...
That represents an utterly impressive growth/gap close for Comcast

 

[rteetz]

I'll wait to see if they state that they're spending 3 billion...then I'll wait longer to see what that buys...

With it be a rolls Royce or a 78 Datsun with new paint on it?

Credit being given where not due

TOTS

I doubt they will say how much their spending did Disney ever publically announce that they spent 1+ billion on DCA?

 

[DDLand]

Here is where you reported it, appears readily apparent.

I think I can clear a little up for you on this front...

When someone says Walt Disney Parks and Resorts, they're talking about the division that holds onto:
1)Disneyland Resort (Disneyland Park, 3 hotels, DCA, and DD)
2)Walt Disney World (4 Parks, outright ownership and licensing from around 30,000 hotel rooms, Disney Springs, Water Parks, WWoS, and golf courses)
3)Tokyo Disney Resort Licensing (They don't own any of the three hotels [soon to be 4], shopping district, or the two parks. They do however receive licensing)
4) Disney Vacation Club(From sales, upkeep fees, and interest on the large loans people take out to afford DVC)
5) Disneyland Paris Resort 80% ownership (They own most of this Resort, but not all. Two theme parks, thousands of hotel rooms, and a shopping and dining district, and other real estate and golfing offerings)
6)Disney Cruise Line (4 ships and of course their private Island)
7)Hong Kong Disneyland 48%ish ownership (1 park and soon to be 3 hotels on property)
8)Aulani (800 room resort)
9)Adventures by Disney
10)Shanghai Disney Resort 42% ownership (coming soon)

When someone says Universal Theme Parks they're talking about:
1)Universal Hollywood-One theme park, City Walk, and licensing from several hotels.
2)Universal Studios Florida Resort-2 theme parks, 50% ownership of several hotels, City Walk, and a Water Park.
3) Licensing Revenue from Universal Studios Singapore
4) For the first time, 51% ownership of Universal Studios Japan.
5)Universal Beijing (coming soon)

As you can see, the two divisions are VERY different. Whereas Disney directly manages and owns tens of thousands of hotel rooms, Universal has 50% to nothing but licensing in their hotels. Things like the cruise line, Euro Disney, and Singapore also underscore major differences while doing any comparisons. So while he said "theme parks," he meant all of that division. However Universal makes so much from their theme parks compared to hotels that Universal has chosen to just call it the "theme park division."

 

[minnie-apple-mouse]

Even at a disparity of 922 to 600 each year...
That represents an utterly impressive growth/gap close for Comcast

Do you mean that is a long way to go? Or its closer than some of us thought?

 

[minnie-apple-mouse]

I think I can clear a little up for you on this front...

When someone says Walt Disney Parks and Resorts, they're talking about the division that holds onto:
1)Disneyland Resort (Disneyland Park, 3 hotels, DCA, and DD)
2)Walt Disney World (4 Parks, outright ownership and licensing from around 30,000 hotel rooms, Disney Springs, Water Parks, WWoS, and golf courses)
3)Tokyo Disney Resort Licensing (They don't own any of the three hotels [soon to be 4], shopping district, or the two parks. They do however receive licensing)
4) Disney Vacation Club(From sales, upkeep fees, and interest on the large loans people take out to afford DVC)
5) Disneyland Paris Resort 80% ownership (They own most of this Resort, but not all. Two theme parks, thousands of hotel rooms, and a shopping and dining district, and other real estate and golfing offerings)
6)Disney Cruise Line (4 ships and of course their private Island)
7)Hong Kong Disneyland 48%ish ownership (1 park and soon to be 3 hotels on property)
8)Aulani (800 room resort)
9)Adventures by Disney
10)Shanghai Disney Resort 42% ownership (coming soon)

When someone says Universal Theme Parks they're talking about:
1)Universal Hollywood-One theme park, City Walk, and licensing from several hotels.
2)Universal Studios Florida Resort-2 theme parks, 50% ownership of several hotels, City Walk, and a Water Park.
3) Licensing Revenue from Universal Studios Singapore
4) For the first time, 51% ownership of Universal Studios Japan.
5)Universal Beijing (coming soon)

As you can see, the two divisions are VERY different. Whereas Disney directly manages and owns tens of thousands of hotel rooms, Universal has 50% to nothing but licensing in their hotels. Things like the cruise line, Euro Disney, and Singapore also underscore major differences while doing any comparisons. So while he said "theme parks," he meant all of that division. However Universal makes so much from their theme parks compared to hotels that Universal has chosen to just call it the "theme park division."

I get that, so to me it sounds like the "WDW theme parks" to compare a bit more apples to apples, would fall significantly from the $922 Million if the rest was removed-similar to what "Universal Theme Parks" did basically "WITHOUT" the "Resorts" portion.

EX:

WDW Theme Parks $700 Million.

US Theme Parks $600 Million.

Obviously it all matters, but I was asked why I cared about having the "& Resorts" portion included, when it was actually written that way.

 

[DDLand]

Even at a disparity of 922 to 600 each year...
That represents an utterly impressive growth/gap close for Comcast

To be clear, I found numbers that suggest pre tax profit of $922 million and Revenues of $4 Billion+ for Walt Disney Parks and Resorts in the most recent quarter. That compares to $354 million on $700+ million in Revenue for Universal Theme Parks.

 

[jtowntoflorida]

I could be misreading the Comcast 2nd quarter report, (the most recent release) but I believe that there's inaccuracies in some of the numbers above. Using the same metric between Walt Disney Company's most recent report (3rd quarter), it appears that the difference isn't as large as you suggested. According to the Comcast release, "Consolidated Operating Income increased 7.9% to $4.1 billion." Compared to Walt Disney Company's $4.1 Billion. They're actually almost identical if I'm reading it right (I will warn that I have misread a thing or two in the past ). Perhaps I'm misreading what your point was, and in which case I apologize. Additionally I would point out that while it is true that Walt Disney Parks and Resorts did indeed post operating income of $922 million, Universal in the most recent quarter reported operating income for their theme parks of $354 million. Walt Disney Parks and Resorts continues to dominate their peers. Walt Disney Parks and Resorts also posted Operating Income growth of $74 million. This compares to Universal's $110 million growth in their theme parks in the quarter. While it's true Universal outgrew Walt Disney Parks and Resorts, it should be noted that Segment Operating Income was negatively effected by weakness incurred by Disneyland Paris and Hong Kong Disneyland. Their domestic parks showed considerable strength.

Shoot. You know what I did? I started with Disney's quarterly numbers, but then grabbed Comcast's annual numbers because I'm not as familiar with the format of their quarterly statements and couldn't find everything I was looking for quickly, and I forgot to go back and then change Disney's numbers to their annual numbers. So yeah, my absolute numbers are crap, but the percentages are still meaningful. The whole point was that Theme Parks is smaller for Universal than Parks & Resorts are for Disney, and because Disney's biggest segment is in trouble, this should mean good news for us as consumers because Parks & Resorts just became really, really important to Disney.

OMG, I'm so embarrassed.

I should have just said that I think this competition because Disney and Universal is over-stated. Then I wouldn't have embarrassed myself.

 

[minnie-apple-mouse]

Shoot. You know what I did? I started with Disney's quarterly numbers, but then grabbed Comcast's annual numbers because I'm not as familiar with the format of their quarterly statements and couldn't find everything I was looking for quickly, and I forgot to go back and then change Disney's numbers to their annual numbers. So yeah, my absolute numbers are crap, but the percentages are still meaningful. The whole point was that Theme Parks is smaller for Universal than Parks & Resorts are for Disney, and because Disney's biggest segment is in trouble, this should mean good news for us as consumers because Parks & Resorts just became really, really important to Disney.

OMG, I'm so embarrassed.

I should have just said that I think this competition because Disney and Universal is over-stated. Then I wouldn't have embarrassed myself.

Certainly doesn't matter, I was just more curious how close US was getting to WDW in the Theme Park arena (less the Resorts), still seem to be gaining some good ground (which they better have), not as much as it first appeared though.

And the next 8 year window will be just as interesting.

 

[jtowntoflorida]

I get that, so to me it sounds like the "WDW theme parks" to compare a bit more apples to apples, would fall significantly from the $922 Million if the rest was removed-similar to what "Universal Theme Parks" did basically "WITHOUT" the "Resorts" portion.

EX:

WDW Theme Parks $700 Million.

US Theme Parks $600 Million.

Obviously it all matters, but I was asked why I cared about having the "& Resorts" portion included, when it was actually written that way.

I think you're getting too caught up in the semantics. Disney calls its segment that includes its theme parks "Parks & Resorts." Universal calls it "Theme Parks." I'm excluding nothing; I'm simply using their labels.

Plus, Disney operates its resorts and as a hotel operator reports on its hotel metrics. For Universal, because Loews operates the hotels, they simply share in the revenue. They don't report the same hotel-related metrics that Disney reports because they're not a hotel operator. I assume Loews reports all the hotel-related metrics.

 

[jtowntoflorida]

Certainly doesn't matter, I was just more curious how close US was getting to WDW in the Theme Park arena (less the Resorts), still seem to be gaining some good ground, not what it first appeared though.

And the next 8 year window will be just as interesting.

But you can't parse out the resorts from the parks because that's not how Disney reports its results. I think you're getting too caught up in what's parks vs. what's resorts. Disney reports them as one segment for financial statement purposes. You may not like what they do, but that's how its reported.

 

[minnie-apple-mouse]

I think you're getting too caught up in the semantics. Disney calls its segment that includes its theme parks "Parks & Resorts." Universal calls it "Theme Parks." I'm excluding nothing; I'm simply using their labels.

Plus, Disney operates its resorts and as a hotel operator reports on its hotel metrics. For Universal, because Loews operates the hotels, they simply share in the revenue. They don't report the same hotel-related metrics that Disney reports because they're not a hotel operator. I assume Loews reports all the hotel-related metrics.

Got ya.

I was trying to give US a bit more credit, or Disney a bit less credit because of all the Resort/DVC/Cruise stuff. But I guess in the end is all part of Disney Theme Park profits.

SO:

WDW $922 Million

US $354 Million.

 

[DDLand]

Shoot. You know what I did? I started with Disney's quarterly numbers, but then grabbed Comcast's annual numbers because I'm not as familiar with the format of their quarterly statements and couldn't find everything I was looking for quickly, and I forgot to go back and then change Disney's numbers to their annual numbers. So yeah, my absolute numbers are crap, but the percentages are still meaningful. The whole point was that Theme Parks is smaller for Universal than Parks & Resorts are for Disney, and because Disney's biggest segment is in trouble, this should mean good news for us as consumers because Parks & Resorts just became really, really important to Disney.

OMG, I'm so embarrassed.

I should have just said that I think this competition because Disney and Universal is over-stated. Then I wouldn't have embarrassed myself.

Don't fret, I once got into a little argument with someone about when a certain quarter ended. I somehow lost track of my months, and didn't realize I was suggesting we replace that typical division with something known as a third. It didn't catch on... Your premise, like you were saying, is sound however. Walt Disney Parks and Resorts needs to be a growth driver, and that's what management is betting big on. While Universal may not be incredibly dependent on theme parks right now, they're treating it like a serious business and are getting serious results.

Also I'm going to add that Comcast's website and reports are terrible, it's like reading a rocket manual.

 

[lockedoutlogic]

Edit...universal is 1/3 of Disney...still along way to go but still a good deal of
Improvement