Walt Disney Quarterly Earnings Climb

[crazy4wdw]

Walt Disney Quarterly Earnings Climb
By GARY GENTILE, AP

LOS ANGELES (Nov. 9) - Profit at media conglomerate The Walt Disney Co. soared 89 percent in the fourth quarter, reflecting strong performance of its movies worldwide, increased attendance at its theme parks and higher revenue from its ESPN cable channel.

The Burbank-based company reported net income of $782 million, or 36 cents per share for the quarter ended Sept. 30, compared to $379 million, or 19 cents per share in the same period last year.

Revenue increased to $8.784 billion from 7.734 billion in the same period last year.

The results beat analyst expectations of 34 cents per share on revenue of $8.694 billion.

Profit rose at its studio, theme parks and media networks divisions, which includes the ABC network, but remained flat at its consumer products unit as the company increased its investment in video games.

The company also delivered a 34 percent increase in net income for the full year, driven primarily by a sharp increase in profits at its studio.

The studio gain came largely from a reduction in marketing costs this year, compared to higher costs last year for distributing a slew of Miramax films the company was obligated to release.

Copyright 2006 The Associated Press.

 

[crazy4wdw]

'Pirates,' 'Cars' spur Disney's success

Scott Powers | Sentinel Staff Writer
Posted November 10, 2006

A strong fourth quarter bolstered a record year for Walt Disney Co. and helped send its stock price Thursday to the highest closing price in five years.

Powered by two blockbuster films, the company said Thursday that profits shot up 33 percent for the 2006 fiscal year to a record $3.4 billion. Sales also set a record of $34.3 billion for the year that ended Sept. 30.

And the performance was reflected on Wall Street. Disney's stock closed at $33.58 on the New York Stock Exchange. The shares have climbed 40 percent this year, second-best after General Motors Corp. among members of the Dow Jones industrial average index.

"We had a great year by just about every measure," Robert Iger told investors in a conference call after his first full year as Disney's chief executive.

The hit movies Pirates of the Caribbean: Dead Man's Chest and Cars helped build Disney's record sales and profits. Pirates alone grossed more than $1 billion. And Iger held it up as an example of Disney's broader strategy: selling hit franchises across multiple platforms. Pirates is also helping sales in areas such as theme-parks attendance, video games and Halloween costumes.

Disney's fourth quarter also showed strength across all four of the company's divisions: media networks, studio entertainment, parks and resorts, and consumer products.

The company more than doubled its quarterly profit to $782 million on $8.78 billion in sales. That allows the company to offer investors diluted earnings of 36 cents a share, an increase of 89 percent over last year's fourth-quarter dividend. For the year, diluted earnings were up 34 percent, to $1.64 per share.

"Looks like it was very, very good. They beat the consensus," said Peter Jankovskis, director of research at Oakbrook Investments.

Some analysts, though, expressed concerns about Disney's outlook for 2007, particularly if consumer debt, gas prices and general inflation make people think twice about going to the theme parks.

Harold Vogel, chief executive officer of Vogel Capital Management, said there is every indication that Disney executives are doing the right thing now.

But, he said, "If those markets weaken, we might have less local spending on theme parks."

Iger and Disney Chief Financial Officer Thomas Staggs expressed optimism for the parks and resorts in 2007, because visitors seem to like Disney's 15-month "Year of a Million Dreams" campaign that began last month and because of the parks' overall strength in the vacation market.

"At the theme parks, the outstanding results again provide evidence of the significant, sustainable advantage we have nurtured and reinforced in this business," Staggs said.

For 2006, the parks and resorts division saw a 10 percent increase in sales, to $9.93 billion, and a 30 percent increase in operating profit, to $1.53 billion. Fourth-quarter increases were similarly strong.

Disney said that success was due in part to the parks' 50th-anniversary celebration, which ended in September; strong Disney Vacation Club sales; and higher per-person spending, which was in turn partly due to higher hotel rates and ticket prices.

Staggs said Walt Disney World's fourth-quarter attendance was up 5 percent and its hotel occupancy increased slightly over the same quarter in 2005. On the other hand, Disneyland's attendance was down 7 percent and its hotel occupancy fell slightly, he said. Both saw increases in per-visitor spending.

Disney's media networks segment, led by the continued strength of ABC-TV's hit shows such as Desperate Housewives and Dancing With the Stars, posted a 10 percent growth in sales in the fourth quarter. And Disney's consumer-products segment, fueled in part by Pirates and Cars toys and games, posted a 9 percent growth in sales.

Disney's studio entertainment -- film -- segment saw the most action in the fourth quarter. Thanks to the Pirates and Cars films and strong sales of The Chronicles of Narnia: The Lion, the Witch and the Wardrobe DVD, the division saw sales increase 33 percent over the fourth quarter of 2005 and posted a $214 million profit.

Nonetheless, earlier this year Disney's movies and videos did so poorly that even with the recent successes, the film division actually saw a 1 percent drop in overall sales for the year. But with lower distribution costs, the division managed a $729 million operating profit on the year.

Information from Bloomberg News was used in this report. Scott Powers can be reached at 407-420-5441 or spowers@orlandosentinel.com.

 

[boettj]

After reading the book DISNEY WAR'S by James Stewart, I understand that their profit margin is only as good as the latest movies they have released. When Eisner took over, it was the animation department that really pushed the company to the next level. A string of hits coupled with the partnership of Pixar, Disney surged through the 90's on the back of animation. Hit's such as Beauty and the Beast, Lion King and Toy Story to mention a few.

With the purchase of Pixar, I am not surprised to see Disney reemerge as a power house.


If you have not read Disney War's by James Stewart, I highly recommend it. The book provides insight into the goings on at Disney while Mr. Eisner was at the helm.

 

[TheRustyScupper]

1) The earnings are up.
2) But major analysts are not high on Disney.
3) They say the upward tick cannot be sustained.
. . . no major movies coming out or due out
. . . crowd levels to Florida are leveling out
4) In fact, Disney announced higher earnings, and their shares fell 3.5% !