Reports of Disney's demise greatly exaggerated?

[Captain Crook]

Disney posted earnings today and surprising everyone, beat street estimates by 2 cents. While earnings were admittedly lower than the same quarter last year, this has to be quite a shock to the doubters who thought Disney should be circling the wagons...

 

[DanG]

that the stock price closed down .17 to 26.50 on an up day for the Dow, S&P and NASDAQ. That is a mere 2% (.50) higher than Disney's 52 week low of 26.

I don't mean to pick on you Capn, but Wall Street has become very skeptical of Disney's prognosis.

DanG

 

[hopemax]

Unfortunately for Disney the stock is still down 30% over the past year.

http://quote.bloomberg.com/fgcgi.cgi?T=marketsquote99_news.ht&s=AO2j6pBYSRGlzbmV5

The last paragraph of this article, talking about Eisner

``He's lost the magic, and he needs to come back with something that re-ignites that sense that something exciting is happening,'' said Darice Grippo, an analyst at John Hancock Funds, which owns Disney shares. ``I think he's struggling.''

One positive indicator, a trend does not make.

 

[Captain Crook]

Well Dan, the closing stock price isn't indicitive as I believe they reported after the bell, did they not? (But I admit I could be wrong on that). As for Wall Street's skepticisim...Well, while I think Wall St. does move business direction, I don't believe they always pick winners & losers very well...It's more like a pick du jour, IMO.

Don't get me wrong, I'm not saying Disney doesn't have problems, but we have other threads on these here boards talking about how it's all over for Disney but as of today's earnings that just isn't true and while "one positive indicator doesn't make a trend," it's better than if they failed to meet estimates as so many people thought would happen (and sadly, others hoped would happen)...

Lastly, I don't mean this as any ringing endorsement of Eisner, I just posted it because it happened...

 

[YoHo]

What's really important about this has nothing to do with Disney, but the economy. Disney is now the second major company (behind Intel) to report better then expected results. this is an indication that the economy is starting to right itself slowly but surely. Which of course helps Disney in the long run. This is a good sign for people waiting for this slump to end.

 

[ez]

and the markets...but I think most of us need only to look at our 401ks or whatever to see the past year has been pretty bad for everyone. I've always heard to look at things in the long term and I think that applies to disney as well.

 

[HBK]

Sorry to rain on the parade. The accountaneers did a wonderful job making all of the cut backs translate into earnings.

The real thing to look at is what's coming down the pike....which is why I feel that most analysts are down on the stock.

Just what does Disney have coming down the pike to trumpet about?

The theme park biz is not struggling, but it is showing signs of softening. Reservations are reported to be down....and the newest park has opened to public indifference.

SIDE NOTE: Who cares if the public stays away from DCA in droves....at least Ei$ner finally got to see his freaking ferris wheel (TM AV). And since Mikey likes it, that Idiot Pressler is thrilled with the park's performance.

The two big movies of the year have bombed. Pearl & Atlantis under performed at the box office, and are relying on a strong home video biz to break freakin even....that amazes me....

And on top of that, what movies is Disney releasing? I'm not aware of all of the corperate arms, but I haven't seen any press tying Disney to anything coming out. The only movie I'm aware of is Monsters Inc....and that's not due out until fourth quarter?

How did Disney cut a profit? The cutbacks. Now that those have happened, let's see what happens later in the year....

 

[Captain Crook]

Disney said that the cutbacks were what allowed them to offset the softening of attendance...Is that bad? Come on, Mikey was ahead of the game on this one. He saw it coming and was able to beat the street. Lets look at the big names who don't...

Most analysts are down on the stock primarily because of the softening of Park attendance and ABC advertising revenues caused by a shrinking economy. There are a few who speak warily of Eisner but that happens every tiime a percieved failure is approaching...But guess what? Disney beat estimates.

Reservations were reported down but the last I heard they were picking up with the start of the "Walt" celebration...

The two big movies "have bombed" yet Disney pictures showed a huge increase in revenues over last year...hmmm...

What movies are Disney releasing? Well, I don't know them all, but The Princess Diaries looks to have BIG potential...

Yes, Disney achieved profit through cutbacks...You know what? They did that first quarter last year as well. Just because this was their "tool" this quarter doesn't mean they've shot their wad. I know you don't like Eisner, but he's a tough cookie and he's looking to stay independent.

 

[JeffJewell]

Mikey was ahead of the game on this one

Personally, I think it's too early to make that assessment. One of the aspects of the "it's the economy, stupid" defense of the cuts is that it completely ignores the fact that the Imagineering cuts (even going back to before the floor fell out of the markets) were much deeper than cuts in other areas. Cuts in your creative division are great if your intention is to make a certain set of current numbers look good, but bad for your company's future if that future depends on what you create (and we all remember Eisner's "we are a content company" cry). When the economy turns around, we'll see if Disney is in a position to create any products that fire the public's imaginations, or if this attempt at a Street-placating performance simply mortgaged the future of the company.

Disney pictures showed a huge increase in revenues over last year

And Pearl Harbor represents a huge increase in the studio's stake in a motion picture. Making ten percent more than last year is pretty meaningless if you spent twice as much as last year to get it.

I know you don't like Eisner, but he's a tough cookie and he's looking to stay independent

This is where we get to the heart of the disagreement on Eisner. In my opinion, who gives a damn if Disney is independent if the next big thing is going to be a five billion dollar cable channel full of Power Rangers re-runs? I'm not feeling the Magic, here.

The results of Eisner's efforts to keep Disney independent lead me to pray for a corporate breakup.

Jeff

 

[DG-12]

Just wondering if any of you debating this saw when Eisner told CNN financial news last night that Pearl Harbor had already earned over $100 million for Disney- Princess Diaries is out this weekend, Monsters Inc., comes out at Thanksgiving etc... Plus, they opened three parks this year- Eisner also pointed out that Disney is ready to turn the corner as soon as the market begins to boom again- Anyway, just thought you all might have found what he had to say interesting


Dana

 

[JeffJewell]

Eisner also pointed out that Disney...

Eisner pointed out, vociferously, that Disney's core business was its content, then he went out and dropped $5 billion on a cable channel.

I don't mean to argue with you, I just wanted to mention that Eisner's sound bites often have nothing whatsoever to do with his actual business plan (other than the fact that they are both intended solely to boost share value).

Jeff

 

[Another Voice]

"...wondering if any of you debating this saw when Eisner told CNN financial news last night that Pearl Harbor had already earned over $100 million for Disney..."

Yes, I saw him make that statement to.

HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA!

I didn’t know he hoped to audition as a replacement for Drew Carey.

 

[HBK]

Disney said that the cutbacks were what allowed them to offset the softening of attendance...Is that bad? Come on, Mikey was ahead of the game on this one. He saw it coming and was able to beat the street. Lets look at the big names who don't...

Ok....if the cutbacks were what the company needed to turn a profit, fine. It's a hard point in business, but cutbacks happen.

But what should make me look to the future of the Disney company and feel that they have any hope of turning the corner? What product do they have in development that makes me say that "hope is coming?" Nothing other than products coming from outside of the company (i.e. Monsters Inc., DisneySeas, any ride development for the US Parks, etc).

What does that say to you? It tells me that Disney doesn't feel it can do any type of original "content" development.

And considering the fact that the Head cheese of the mouse house is claiming over and over again that the Disney company is a "content company" I think that's pathetic.

It's a pathetic business plan (make a decision, your a content company or your a service provider), it's pathetic leadership (Pre$$ler took the cake with that interview), and apparently unless someone steps in, the company is going to become a pathetic shell of it's of it's former self.

Walt would be embarassed at the current state of the company.

 

[YoHo]

HBK, Again you ignore the princess Diaries Which is internal. Also, While Disney isn't funding it, TDS was designed in house. Maybe Av can jog my memory, but I could sware that I saw a preview for another Dimension film coming out shortly that sparked my interest. They had a couple of movies earlier in the year that did fairly well.

while I agree that there isn't a decernable vision at this time. Beating earning is still beating earnings.

In all truth, Intel is more impressive since the didn't have layoffs.

 

[HBK]

But the Princess Diaries has not sparked one IOTA of media interst to make it the "great hope". It looks like it will be a decent movie....but not a movie to hang your fiscal hat on.

To be honest, the only pub I've seen for it has been on the Disney channel or Disney fan sites (i.e. Laughing place, etc).

As for Tokyo Disney Seas, yes it was developed internally....but it's an outsourced project. Disney isn't going to reap the majority of the success. I mean what, they're probably getting 7%?

I stand by my statement. Nothing coming down the pike has the potential to save Disney.

 

[YoHo]

I wouldn't suggest that the princess Diaries is going to save Disney, but it currently is doing some major advertising on all the networks and billboards

 

[HBK]

I wouldn't suggest that the princess Diaries is going to save Disney, but it currently is doing some major advertising on all the networks and billboards

Using that theory, Pearl & Atlantis were HUGE!

Come on....

 

[YoHo]

It also has extreamly positive buzz from what I've seen, although I'm no expert. Princess Diaries also supposedly marks a return to classic Disney family live action, so even if it doesn't turn things around, its performance is very important to the film division.

 

[HBK]

It also has extreamly positive buzz from what I've seen, although I'm no expert. Princess Diaries also supposedly marks a return to classic Disney family live action, so even if it doesn't turn things around, its performance is very important to the film division.

Yoho, we heard this song and dance with Atlantis. What happens when the movie fails? Does it kill any momentum in the film division?

I think the movie looks cute, and I'm sure I'm going to get dragged to it....but I don't know that it's a momentum maker for Disney. We've already seen Disney's designated "momentum" maker in Pearl.

 

[YoHo]

Atlantis had negative buzz up until it initially opened. Princess diaries seems to have been positive from Day one.


Disney was backing away fromPearl before it even released and waere talking about the family entertainment side for a while. At this point, they are looking for what works. And don't forget Spy Kids. If Princess Diaries is a hit, then Disney has two family entertainment successes this year. That's something to build on. My concern is that they also have other big budget potential failures in the works too.

Disney needs something that is a critical and finacial success to stop from running into the ground.