Economy Related: Article on Local Amusement Parks

[SamIAm21]

http://www.fool.com/investing/general/2008/08/05/the-abcs-and-defs-of-amusement-parks.aspx

Apparently, the idea of a Staycation has benefitted these local parks, but what will we see out of Disney (DIS $31.02) come October?? Could their earnings stability just be Floridians who decided to stay home this summer.

 

[FireDancer]

That article might not be as bad for Disney as it appears when you consider that Parks & Resorts are not the whole picture for a company as diversified as Disney.

I think that the success of Wall-E may help boost the Revenue of the company against the segment losses from Parks & Resorts. Remember that while P & R had an increase 2007 over 2006 Studio Entertainment did not. P & R contributed 39% of the segment income last year towards the bottom line while Studio Entertainment contributed 28%. The Media network segment should also be up since they had to absorb the write off of Disney Mobile last year which dragged them down.

When you consider that many fall and Christmas trips are already planned and paid for, 2008 will most likely not be a problem balance sheet wise for Disney (compared with the DJIA) 2009, that may be a different story if certain cost trends continue. The long term effect of fuel and food prices compounded by a drop in attendance is going to be more of a problem in 2009 than 2008 and the other segments will not be able to buoy the stock. I wonder what Warren Buffett would predict though.