Disney Posts Record 1st Quarter Results

[DDLand]

FIRST QUARTER EARNINGS FOR FISCAL 2015

BURBANK, Calif. – The Walt Disney Company today reported earnings for its first fiscal quarter ended December 27, 2014. Diluted earnings per share (EPS) for the first quarter increased 23% to $1.27 from $1.03 in the prior-year quarter.

http://thewaltdisneycompany.com/sites/default/files/reports/q1-fy15-earnings.pdf



Results in the year-earlier period were buoyed by the release of the blockbuster animated film “Frozen,” which continues to be a boon for merchandise sales.

Shares climbed more than 3% after hours.

http://www.wsj.com/articles/disney-...1422999022?mod=WSJ_hp_LEFTWhatsNewsCollection
(Has a paywall)


Disney reported $13.4 billion in first quarter revenue, a figure that grew 9% year-over-year and easily cleared the $12.9 billion analyst consensus. Net income for the quarter surged 19% to $2.2 billion and resulted in $1.27 of earnings per share, a figure that grew 23% over the prior-year period and beat the Wall Street estimate by 20 cents per share.
http://www.forbes.com/sites/maggiem...c-of-disney-q1-earnings-soar-above-estimates/

 

[DDLand]

Interesting information from the live blog of the earnings call. http://www.laughingplace.com/w/news/2015/02/03/disney-earnings-live-blog-2/

Major points I was impressed with.

513pm ET: Rasulo says Walt Disney World and Disneyland each set attendance records last quarter

522pm ET: Rasulo says Disney resort hotels saw occupancy around 89%.

523pm ET: Next question asks about benefits of MyMagic+. Bob says they’ve gotten excelled guest feedback; says they’ve getting to experience more.

540pm ET: Iger is asked about Shanghai and future expansion of parks. He mentions Avatarland (2017), says there’s lots of design work going on for Star War. He promises more details later this year and that they have “big plans.”

Read the whole thing to get the full perspective!

 

[rteetz]

So no announced Shanghai date like rumored.

He did say spring tho so May 8th is still very possible.

 

[rteetz]

I will say though that if you raise prices it's not hard to see higher profits. Disney continually raises prices.

 

[rteetz]

The hotel occupancy rate is interesting as well. 89-91% is about as high as they can get with varying length of stays. They also just reduced the number of rooms with the poly DVC expansion as those rooms aren't calculated into the that number.

 

[mvk]

I will say though that if you raise prices it's not hard to see higher profits. Disney continually raises prices.

Well they also had record attendance, so that played a very large role in the higher profits.

Nevermind, forgot where I was for a second. Carry on.

 

[DDLand]

The hotel occupancy rate is interesting as well. 89-91% is about as high as they can get with varying length of stays. They also just reduced the number of rooms with the poly DVC expansion as those rooms aren't calculated into the that number.

I'm betting so long as the economy continues on course, Disney could be right where they want occupancy rates within 3 years. The problem that has existed for a decade is approaching non issue status. Great!

It's true they reduced capacity, but that's only a drop in the bucket compared to the thousands of rooms at Walt Disney World. There's no way to beat around the bush, Hotels are recovering.

 

[rteetz]

Well they also had record attendance, so that played a very large role in the higher profits.

Nevermind, forgot where I was for a second. Carry on.

Record attendance and they raised ticket prices which would lead to higher profits.

 

[rteetz]

I'm betting so long as the economy continues on course, Disney could be right where they want occupancy rates within 3 years. The problem that has existed for a decade is approaching non issue status. Great!

It's true they reduced capacity, but that's only a drop in the bucket compared to the thousands of rooms at Walt Disney World. There's no way to beat around the bush, Hotels are recovering.

But like I said you really can't get above the 91% number because of people checking in and out on a daily basis. Disney is only 2% away from that so I think they are where they want to be. Take more rooms away during the rumored WL DVC expansion and that number goes up more. That's why Disney isn't building new they are just taking away and converting to DVC to get better numbers.

 

[rteetz]

I must say Disney had a great quarter but with high occupancy rates and high attendance it's time to do something. Record profits means they have money.

The parks are more crowded than ever.

Disney needs to expand WDW. All four parks need growth even tho many say MK doesn't. But truly it does because it's the most crowded park in the world.

Disney may also need to start looking at the option to build another park to disperse crowds. Hotel expansions or another hotel should also be looked at.

Build it and they will come simple as that.

 

[DDLand]

But like I said you really can't get above the 91% number because of people checking in and out on a daily basis. Disney is only 2% away from that so I think they are where they want to be. Take more rooms away during the rumored WL DVC expansion and that number goes up more. That's why Disney isn't building new they are just taking away and converting to DVC to get better numbers.

They'll find new ways to better utilize existing property and create new operational efficiencies. I think they can and will fill past 91% if there's demand and guests are willing to pay.

It makes one wonder if they'll have second thoughts on Wilderness Lodge. If what you're saying is right about 91% being maximum (though I'd say never underestimate them) why would they take hotel rooms out of service? Maybe the demand for DVC is huge...

I'm not sure about what you're saying in relationship to dumping small amounts of rooms to DVC. These rooms won't even move the needle in the occupancy. Great, 50 rooms fewer at WL but that doesn't really effect RO. You'd have to take hundreds of rooms out and convert them to DVC to make a difference. Which hasn't really happened yet.

 

[DDLand]

Whoops, quoted the wrong person.

 

[rteetz]

They'll find new ways to better utilize existing property and create new operational efficiencies. I think they can and will fill past 91% if there's demand and guests are willing to pay.

It makes one wonder if they'll have second thoughts on Wilderness Lodge. If what you're saying is right about 91% being maximum (though I'd say never underestimate them) why would they take hotel rooms out of service? Maybe the demand for DVC is huge...

I'm not sure about what you're saying in relationship to dumping small amounts of rooms to DVC. These rooms won't even move the needle in the occupancy. Great, 50 rooms fewer at WL but that doesn't really effect RO. You'd have to take hundreds of rooms out and convert them to DVC to make a difference. Which hasn't really happened yet.

I said you really can't get past 91% because of the daily check in and check out. 100% is practically impossible 91 is not a bad number.

DVC is a whole other ball game we have discussed that here multiple times. Eisner started it when they built OKW the original DVC resort. Saratoga was next. Then they started adding to existing deluxes. DVC really started out to be a good deal. It is not a good deal of you buy today prices are higher than ever and it's harder to get a value out of it.

They took out well over 100 at the Poly...

Rumor has it club level rooms will basically all be DVC and possibly some more. They are also rumored to build more bungalows over the water there. DVC really changes the tune of a resort.

 

[DDLand]

I must say Disney had a great quarter but with high occupancy rates and high attendance it's time to do something. Record profits means they have money.

The parks are more crowded than ever.

Disney needs to expand WDW. All four parks need growth even tho many say MK doesn't. But truly it does because it's the most crowded park in the world.

Disney may also need to start looking at the option to build another park to disperse crowds. Hotel expansions or another hotel should also be looked at.

Build it and they will come simple as that.

They are. Capital expenditures for Parks and Resorts increased to $877,000,000 from $539,000,000 in the year ago quarter. Now is it where you want it being spent rteetz? Only (I have to laugh when I put only and several hundred million in the same sentence) $239,000,000 was spent in domestic theme parks representing an increase of $24,000,000 YOY. International took most of the resources devouring $638,000,000 in this quarter. So I'd say it's probably not being spent where you want it... The company is international now. Shanghai is the future.

Iger also noted that guests are now able to do more each day thanks to My Magic. That's an example of innovative new technologies that translate into better experience for guests that don't involve big construction projects.

As for the build it they will come remark, with record attendance on both coasts that seems like a none issue at the moment.

 

[DDLand]

I said you really can't get past 91% because of the daily check in and check out. 100% is practically impossible 91 is not a bad number.

DVC is a whole other ball game we have discussed that here multiple times. Eisner started it when they built OKW the original DVC resort. Saratoga was next. Then they started adding to existing deluxes. DVC really started out to be a good deal. It is not a good deal of you buy today prices are higher than ever and it's harder to get a value out of it.

They took out well over 100 at the Poly...

Rumor has it club level rooms will basically all be DVC and possibly some more. They are also rumored to build more bungalows over the water there. DVC really changes the tune of a resort.

I'd expect them to continue to push that number higher as they start to feel the need to. Disney's going to leverage everything they've got in existing assets. 100% is of course not reasonable, but don't expect them to leave money on the table.

I know about DVC my friend. My family is a member lol. Saratoga actually was not the second DVC. Look to Vero, Hilton, and Board Walk as examples.
http://www.nytimes.com/1996/10/20/travel/at-disney-world-a-boardwalk-village.html

A hundred hotel rooms in one of the most high occupancy resorts? That seems backwards to the strategy you're saying they're using. Wouldn't they start with the under performing ones first? Just a thought...

 

[rteetz]

They are. Capital expenditures for Parks and Resorts increased to $877,000,000 from $539,000,000 in the year ago quarter. Now is it where you want it being spent rteetz? Only (I have to laugh when I put only and several hundred million in the same sentence) $239,000,000 was spent in domestic theme parks representing an increase of $24,000,000 YOY. International took most of the resources devouring $638,000,000 in this quarter. So I'd say it's probably not being spent where you want it... The company is international now. Shanghai is the future.

Iger also noted that guests are now able to do more each day thanks to My Magic. That's an example of innovative new technologies that translate into better experience for guests that don't involve big construction projects.

As for the build it they will come remark, with record attendance on both coasts that seems like a none issue at the moment.

That's great their international they should be but you can't neglect the your domestic parks. Shanghai is the future but you still have a future at WDW and DL.

Yes they have no problem with people coming but that really is the problem. There used to be dead times of the year at Disney now there isn't. Every time is busy. This means they need expansion they need more things to do to disperse the crowds.

Build more and even more people will come and you get even more record profit and attendance. You can't tell me Disney doesn't want more people in their parks this is an easy way to do it.

I don't feel I was able to do less before MyMagic+ I'd say it's about the same and I wasnt a big FP user before the new system. I like to think many would agree with me on that point. Now that may be true with new time guests but how would they know because they are new.

 

[lockedoutlogic]

I'm betting so long as the economy continues on course, Disney could be right where they want occupancy rates within 3 years. The problem that has existed for a decade is approaching non issue status. Great!

It's true they reduced capacity, but that's only a drop in the bucket compared to the thousands of rooms at Walt Disney World. There's no way to beat around the bush, Hotels are recovering.

Hotels are 100% a function of the overall picture...as you well know.

So there is no such thing as a "hotel recovery"...it is perpetually tied to the wave.

Everyone is living it up right now... No doubt.

Just as an FYI...a certain Hotel I knew a 99.8% occupancy in 2000. And had averaged over 95% for the previous 12 years.

All relative...is the point.

 

[DDLand]

Hotels are 100% a function of the overall picture...as you well know.

So there is no such thing as a "hotel recovery"...it is perpetually tied to the wave.

Everyone is living it up right now... No doubt.

Just as an FYI...a certain Hotel I knew a 99.8% occupancy in 2000. And had averaged over 95% for the previous 12 years.

All relative...is the point.

You're 100% right.

These hotel rooms have never actually filled to maximum guests since pre 9/11. It's kind of like if they got a big pair of boots a decade ago and they finally just grew into them. The problem that you accurately pointed out is the feet could shrink at any moment 10 sizes if any of our many bubbles decides to pop...

Hey, this is Disney. Might as well "celebrate today."

Interesting, it seems to make sense. Hotels are optimized to have fast daily room turnaround. You're obviously the expert in the room on this, what would the other 9% rteetz keeps talking about be doing?

 

[lockedoutlogic]

They are. Capital expenditures for Parks and Resorts increased to $877,000,000 from $539,000,000 in the year ago quarter. Now is it where you want it being spent rteetz? Only (I have to laugh when I put only and several hundred million in the same sentence) $239,000,000 was spent in domestic theme parks representing an increase of $24,000,000 YOY. International took most of the resources devouring $638,000,000 in this quarter. So I'd say it's probably not being spent where you want it... The company is international now. Shanghai is the future.

Iger also noted that guests are now able to do more each day thanks to My Magic. That's an example of innovative new technologies that translate into better experience for guests that don't involve big construction projects.

As for the build it they will come remark, with record attendance on both coasts that seems like a none issue at the moment.

I gotta ask...and I'm trying to be fair here...but this is now coming up as a popular "Iger knows best" refrain - but what in the hell does building a... Cough...5 billion dollar money pit in china have to do with any of us?

No benefit...not now or later. It's not as though they are gonna build a Death Star in the backlot of studios with yuan...

If you're gonna take the "ha ha...I know business and business is always right" tact...
I'm gonna counter with "common sense is not so common" realist approach.

They're burning through cash in Paris and china...and that just isn't gonna yield anything good for us east coast profit pack mules

 

[rteetz]

I gotta ask...and I'm trying to be fair here...but this is now coming up as a popular "Iger knows best" refrain - but what in the hell does building a... Cough...5 billion dollar money pit in china have to do with any of us?

No benefit...not now or later. It's not as though they are gonna build a Death Star in the backlot of studios with yuan...

If you're gonna take the "ha ha...I know business and business is always right" tact...
I'm gonna counter with "common sense is not so common" realist approach.

They're burning through cash in Paris and china...and that just isn't gonna yield anything good for us east coast profit pack mules

Bingo. All this profit and the U.S. isn't getting anything really. Disney doesn't fully own Shanghai so they will make profit but not as much as they will from WDW and DL which are their biggest money makers. Why not invest in them.