Disney finds treasure in videos, TV

[crazy4wdw]

Disney finds treasure in videos, TV

Christopher Boyd | Sentinel Staff Writer
Posted February 8, 2007

Soaring home-video sales and strong performance from its television networks ignited Walt Disney Co.'s first-quarter earnings, which more than doubled from the same period a year earlier.

The parent of Walt Disney World on Wednesday reported that it earned $1.7 billion, or 79 cents a share, during the quarter ended Dec. 30. During the same quarter in 2005, the company earned $734 million, or 37 cents a share.

Excluding gains from the sale of its interest in E! Entertainment and Us Weekly, it earned 50 cents a share, which blew past the 39 cents a share that stock analysts had expected. The results were announced after the stock market closed.

Theme parks and resorts operations posted modest returns during the quarter, with year-over-year revenue rising 4 percent. The growth was centered on Disney World, where increased ticket prices and attendance outpaced rising operating costs.

Disney Chief Financial Officer Tom Staggs said attendance at Disney World increased 3 percent during the quarter, and the bookings through March are also up. Attendance at Disneyland in Southern California was flat.

The company's studio operations posted the biggest gains, largely the result of the home-video release of Pirates of the Caribbean: Dead Man's Chest, Cars and the platinum release of The Little Mermaid. Studio entertainment revenue rose 29 percent to $2.6 billion during the quarter.

"It all went very well for them," said Harold Vogel, chief executive officer of Vogel Capital Management. "The overall economy is doing well, gas prices are lower than they were, and the outlook for the next few months is good."

Revenue from Disney's cable and broadcasting holdings -- which include the ABC Television Network, the ESPN cable sports channel and the youth-oriented Disney Channels -- increased 6 percent to $3.9 billion.

ESPN had particularly strong revenue growth as it picked up Monday Night Football from ABC. Disney's consumer products division was the only loser during the final three months of 2006. Revenue fell 6 percent to $692 million. The company blamed lower guaranteed revenue from contracts and a decline in cash flow from self-published titles.

Disney shares closed at $35.48 on Wednesday, up 29 cents.

During a discussion of quarterly results that followed the release of earnings, Staggs said increased attendance at Disney World was a domestic phenomenon. The weaker dollar had little impact on international visitation, he said.

"International travel wasn't the driver of growth at Walt Disney World," he said. "It doesn't look like the weak dollar has brought an abnormally large number of people to the theme parks."

 

[exDS vet]

I find this part the most interesting of the whole article;

Disney's consumer products division was the only loser during the final three months of 2006. Revenue fell 6 percent to $692 million. The company blamed lower guaranteed revenue from contracts and a decline in cash flow from self-published titles.

With the recent talk of problems between Disney and The Children's Place over the TDS sale, I am not surprised to see that Consumer Products so much. What's even worse is that the 6% drop came during the last three months of 2006. This means that they took a big loss during their most profitable season.

I'm no financial forecaster, but even I can see that if DCP did so poorly during the holiday season, there is no hope for a rebound the rest of the fiscal year. Looks like the rest of the company will have to step-up their performance, but here are some potential problems:

The "Year of a million dreams" promotion is not living up to the advanced billing, to which I say DUH! WDW is holding it's own, while DLR is dropping again.

ABC is not faltering yet, but give it some time. The big shows are going to lose some audience share due to inconsistent programming. These early season breaks are going to hurt shows like "Lost" if the network is not careful.

ESPN got MNF, but they lost Michaels and Madden. Now I haven't followed the MNF ratings, but ABC would not have moved it if they were great.

The nets also don't have any major marquee sporting events this year. ABC lost the BCS and their first round playoff games, plus no Super Bowl.

The only bright spot could be the studio. You know they are banking (and praying) for another Pirates success. I predict that POTC 3 will underperform #2. And the reason will be that they were released too close to each other. This isn't Lord of the Rings after all.

This could be the year that the people finally get tired of all of the extra synergy, saying enough is enoug. Pirate's Lair on Tom Sawyer Island? What's that all about anyway. As much as I hated the "enhancements" to the POTC ride, this one makes absoluetly no sense. I mean really. Pirates in Frontierland? How is this supposed to work with the theme? But hey, if they can put Nemo in Tomorrowland, I guess they can do anything.

Does anybody know when the new Hooters will be opening in the old Plaza Pavillion? Can't wait to see all the princesses in those skanky outfits. I even saw on the entertainment calender that the "Battle of the Bells", a mud wrestling event featuring Belle and Tinkerbell will be taking place at 1:15, 3:00, 4:00 and 5:45 daily in front of Sleeping Beauty Castle.

Also new this summer will be the return of "Cosmic Waves" This time there will be nightly wet t-shirt contests featuring Jasmine, Ariel, Cinderella and Snow White. The shows will be at 8:30, 10, 11, and Midnight. Due to the whole magic spell thing, Mulan will replace Cinderella for the Midnight show only.