Disney's 2013 Earnings

[jcb]

Disney releases its 2013 fiscal year earnings report in a few minutes and then, at 5 pm (on 11/7/2013) Bob Iger and Jay Rasulo conduct a "live" Earnings Results Webcast.

I'm drafting a blog - which I hope will be somewhat comprehensive - but I thought I might also start a thread to provide more of a "live" report on the "live" webcast.

During the webcast Iger or Rasulo *sometimes* discuss theme park results. Typically, this amounts to data on current bookings, spending per guest and other information. Likely gone are the days when Iger or Rasulo had to defend the dastardly (from an investor point of view) practice of "discounting." To be sure, Disney still discounts ("free" dining, for example) but much less than it had to do in the latter part of the first decade.

While Disney's website says that "A hard copy of the earnings release will be available online at approximately 4:15 p.m. EST on November 7th, 2013", like most things on its website, Disney is behind.

 

[jcb]

Fourth Quarter and Full Year Earnings report is now available at:

http://thewaltdisneycompany.com/sites/default/files/reports/q4-fy13-earnings.pdf

Highlights:

"Revenues for the year increased 7% to a record $45.0 billion." Remember, revenue is before costs but "net income" increased 8%.

 

[jcb]

Parks and Resorts (which includes the cruise ships) is up 9 percent in revenue and 17 percent in operating income.

Remember, these figures only compare 2013 to 2012. They give no comparison beyond last year.

 

[wiigirl]

Interesting....

 

[jcb]

Disney's analysis for Parks and Resorts:

For the year, operating income growth reflected increases at our domestic parks and resorts, Disney Vacation Club and Hong Kong Disneyland Resort, partially offset by a decrease at Disneyland Paris and higher pre-opening costs at Shanghai Disney Resort.
Operating income growth at our domestic parks and resorts was due to increased guest spending, attendance and occupied room nights, partially offset by higher costs. Increased guest spending was due to higher average ticket prices, food, beverage and merchandise spending and average daily hotel room rates. Cost increases were driven by spending on new guest offerings and labor and other cost inflation. Significant new guest offerings included MyMagic+, the expansions of Disney California Adventure and the Magic Kingdom at Walt Disney World Resort and Disney's Art of Animation Resort. The increase at Disney Vacation Club was primarily driven by sales of The Villas at Disney's Grand Floridian Resort & Spa, which is a higher margin property.
Operating income growth at Hong Kong Disneyland Resort was due to higher guest spending and attendance, partially offset by higher costs driven by resort expansion and labor and other cost inflation.
At Disneyland Paris, increased guest spending was more than offset by lower attendance, fewer occupied room nights and labor and other cost inflation. Increased guest spending at our international resorts was due to higher average ticket prices, the opening of the World of Disney store in July 2012 at Disneyland Paris and increased average daily hotel room rates.

 

[jcb]

The surprise (for me) is the growth in consumer products.

Revenues increased 9% to $3.6 billion and segment operating income increased 19% to $1.1 billion.

Merchandise for Disney Junior, Monsters University, Mickey and Minnie, Iron Man and Planes helped.

 

[jcb]

Disney Infinity helped the Interactive segment but it is still not making money.

For the year, segment revenues increased 26% to $1.1 billion and segment operating results improved by $129 million to a loss of $87 million.

Disney Infinity likely helped the final quarter results. For the quarter, the segment had operating income of 16 million.

 

[jcb]

I also like to see what Disney invests in the resorts. There are the usual operating expenses but now I'm talking about capital expenditures.

Capital spending dropped by half for the domestic parks and resorts from roughly $2.2 billion (in 2012) to $1.1 billion (in 2013). This isn't necessarily a bad thing given what Disney spent on capital in 2012.

Again, what I like to see are trends over several years. Year to year comparisons provide a very thin trend.

ETA: I should have mentioned that international capital spending is up - by about a third, from $641 million to $970 million (Disneyland Shanghai, most likely).

 

[WebmasterJohn]

I am surprised to see Disney stocks down almost 3% today (as of the time of this post).

 

[jcb]

What Disney spent on Parks and Resorts "capital" in 2012:

the final progress payment for the Disney Fantasy cruise ship, the expansion of Disney California Adventure, the construction of Disney's Art of Animation Resort and development of MyMagic +, compared to the current year.

 

[jcb]

I am surprised to see Disney stocks down almost 3% today (as of the time of this post).

Me too.

But investors get nervous around annual report time.

Jason Garcia had a good article on investor expectations.

I look for it to recover a good bit by tomorrow.

 

[jcb]

Disney's share price this time last year was below $50. It got as high as $69.34 today but closed at $67.15.

These are per share prices. Source Disney Investment Website.

 

[jcb]

Now for the webcast.

Listening to Peter Pan music - which has a strange Star Trek V connection.

Song of the South now.

 

[jcb]

With two music degrees, I always wonder whether the music choices are purposeful.

 

[jcb]

Remember - Bob Iger is Chairman and CEO; Jay Rasulo is Senior Executive VP and CFO.

Duh

 

[jcb]

Official Release date for Star Wars Episode VII: December 18, 2015

 

[jcb]

Second big news is Netflix/Marvel deal announced earlier today.

To listen go to: http://thewaltdisneycompany.com/investors/events

 

[jcb]

DL and WDW set record attendance.

 

[jcb]

Iger is still talking - Movies.

Frozen and some movie about Walt Disney.

 

[jcb]

Rasulo reads earnings. Strong year, a bit of cheerleading before rationalizing ESPN quarterly results.

ESPN is a very important segment but it is getting some stiff competition.