News Disney’s Q2 FY25 Earnings Results Webcast

[Kamikaze]

…but I don’t want to be mean

Or is it that you actually don't mean anything, and you think your vagueness can somehow convince people you know what you're talking about?

 

[peter11435]

Or is it that you actually don't mean anything, and you think your vagueness can somehow convince people you know what you're talking about?

We have a winner

 

[Kamikaze]

We have a winner

I've always given him the benefit of the doubt because I'm not sure if his writing style is 'doddering old man' or 'English is my 14th language', but when you show up and accuse the company of securities fraud with zero proof because a Quarterly doesn't fit your narrative, its time to start asking for specifics.

 

[Nubs70]

You're still not saying anything.

State your exact point.

"Correct x-1" = incorrect

 

[Chef Mickey]

The post you are responding to didn't suggest profit was bad, though. It suggested that demanding that profits must endlessly grow is negative. For example, if Disney knew they would make $1 billion dollars profit each quarter adjusted for inflation forever off their parks but there was no potential for those profits to grow any further, the company would be disincentivised from investing in them in favour of other businesses with greater growth potential. The end result could be that a highly profitable and viable business that keeps tens if not hundreds of thousands of people employed is destroyed because of low growth potential.

It was, in fact, this mentality that led WDW to stagnate during much of Iger's tenure and the development of all of these different mechanisms for squeezing more profit out of the existing facilities rather than pouring more money into what they considered a mature (but highly profitable) business with low growth potential. This also helps explain why investors are far more interested in streaming than the parks and resorts division: they see more potential for growth even if it will struggle to be as profitable anytime soon.

It suggested growing profit endlessly is somewhat negative. Disney just did it less well than they should have but would argue they "did" invest in their parks. You're basically just highlighting Disney is incompetent and is why their stock under-performed. They should have done both and would have been rewarded with higher share prices.

All the incentives are aligned that when customers are happy, you'll make more money. If customers aren't happy, they don't go to your movies, download your content, or eventually, go to your parks. Objectively, parks performed well which I can't criticize too much...I just happen to disagree with their approach. They also made parks less durable of an advantage because they've simply raised prices and extracted as much consumer surplus as possible.

 

[Sirwalterraleigh]

Or is it that you actually don't mean anything, and you think your vagueness can somehow convince people you know what you're talking about?

Stupor is 100% wrong…lock it in. And appears to show up after absences when certain “friendly” corporate narratives aren’t gaining traction.

In this case…that they’re doing “well”…when the factual analysis says they are viewed by the market as flat…paddling in circles

Clear enough?

We have a winner

Did you come up with an actual idea/contribution yet? Of do we get more “whispers of sweet nothingness” from the Oracle of I-Drive today?

 

[BrianLo]

People comparing parks revenue from 2015 to today need to remember it’s not comparable - The division was Parks & Resorts then, and during Chapek’s reign there they added consumer products to it.

FYI I did account for that in my figures I presented. The 5.3B more is comparing parks + consumer products then to just experiences today. Both of those divisions collectively have doubled.

Experiences is not the story for Disney’s flat decade, it’s very much linear.

Since 10 years ago: linear makes 3.9B less and parks + consumer products make 5.3B more.

Edit - when I have a moment I’ll pull out consumer products entirely. They still report the breakdown on each quarter.

 

[Kamikaze]

Stupor is 100% wrong…lock it in. And appears to show up after absences when certain “friendly” corporate narratives aren’t gaining traction.

In this case…that they’re doing “well”…when the factual analysis says try are viewed by the market as flat…paddling in circles

Clear enough?

Who exactly is ‘Stupor’? A poster here? Sorry I don’t know silly nicknames.

What are they wrong about exactly? Not just saying ‘100%’, state what you think is wrong.

What ‘corporate narratives’ are you referring to? Just one or two specific examples, please.

As far as the analysis of the company’s performance being flat - what would the numbers have to be for you to say that they were doing well? Or god forbid, improving?

 

[Sir_Cliff]

It suggested growing profit endlessly is somewhat negative. Disney just did it less well than they should have but would argue they "did" invest in their parks. You're basically just highlighting Disney is incompetent and is why their stock under-performed. They should have done both and would have been rewarded with higher share prices.

All the incentives are aligned that when customers are happy, you'll make more money. If customers aren't happy, they don't go to your movies, download your content, or eventually, go to your parks. Objectively, parks performed well which I can't criticize too much...I just happen to disagree with their approach. They also made parks less durable of an advantage because they've simply raised prices and extracted as much consumer surplus as possible.

But this is just it: the parks are doing well and profits are growing despite the fact they're operating in an objectively difficult environment. Based on the metric of ever-growing profits, you could actually argue that Iger & co. are managing the parks very well and certainly a lot better than their competitors over at Comcast. When it comes to the share price, what is notable is how little investors care about the Parks & Resorts relative to the other divisions. Indeed, Disney's shares soared when they were all closed or at reduced capacity indefinitely during the pandemic.

The notion that happy customers mean ever-increasing profits just doesn't make sense unless you can either keep growing the number of customers quarter after quarter or you can keep squeezing more money out of them quarter after quarter. Prior to Universal's success with Harry Potter, Disney was very much focussed on the latter strategy in Florida because they thought it was a mature business without much potential for growth in terms of customer numbers. That has changed somewhat with a recognition there is room to grow the market and that strategy probably left them with less capacity than they need.

If you're unhappy with how they have been managing the parks, though, it is because their focus has been on the need to find a way to avoid ever having a quarter where profits didn't grow relative to the prior year regardless of what else is going on in the world. That is the perverse incentive that is being critiqued here.

 

[Sirwalterraleigh]

But this is just it: the parks are doing well and profits are growing despite the fact they're operating in an objectively difficult environment. Based on the metric of ever-growing profits, you could actually argue that Iger & co. are managing the parks very well and certainly a lot better than their competitors over at Comcast. When it comes to the share price, what is notable is how little investors care about the Parks & Resorts relative to the other divisions. Indeed, Disney's shares soared when they were all closed or at reduced capacity indefinitely during the pandemic.

The notion that happy customers mean ever-increasing profits just doesn't make sense unless you can either keep growing the number of customers quarter after quarter or you can keep squeezing more money out of them quarter after quarter. Prior to Universal's success with Harry Potter, Disney was very much focussed on the latter strategy in Florida because they thought it was a mature business without much potential for growth in terms of customer numbers. That has changed somewhat with a recognition there is room to grow the market and that strategy probably left them with less capacity than they need.

If you're unhappy with how they have been managing the parks, though, it is because their focus has been on the need to find a way to avoid ever having a quarter where profits didn't grow relative to the prior year regardless of what else is going on in the world. That is the perverse incentive that is being critiqued here.

You want more Iger?

You want more repetitive sequels and upsells on everything they can conceive of on your “leisure” time?

…you’re gonna get it, bud…rejoice

Let’s reap the rewards

 

[BrianLo]

Here’s the exact apples to apples comparison of the parks. The only thing we lose is knowing the contribution of International. But the suspicion at the time was it was running negative and they only started unburying it once Shanghai was online and Paris turned the corner.

Either way domestic parks have had a massive run. (Which I think is a horrible indictment of squeezing consumers with a splash of DCL)… but it has no bearing on the flat decade.

 

[Sirwalterraleigh]

Here’s the exact apples to apples comparison of the parks. The only thing we lose is knowing the contribution of International. But the suspicion at the time was it was running negative and they only started unburying it once Shanghai was online and Paris turned the corner.

Either way domestic parks have had a massive run. (Which I think is a horrible indictment of squeezing consumers with a splash of DCL)… but it has no bearing on the flat decade.

View attachment 858071
View attachment 858073

So why do they trade at their 1/1/2015 price?

And realize:
1. That number is dead on
2. Dividends are a joke…no splits (if you’re into such things)
3. The market has risen by 241% in that timeframe

Let’s assume it’s not about money…it’s all a “confidence game”…

So who’s not getting a lot of love?

 

[BrianLo]

So why do they trade at their 1/1/2015 price?

And realize:
1. That number is dead on
2. Dividends are a joke…no splits (if you’re into such things)
3. The market has risen by 241% in that timeframe

Let’s assume it’s not about money…it’s all a “confidence game”…

So who’s not getting a lot of love?

1. Of course, dead on, I’m glad you’ve moved on from thinking they are faked. I’ve answered that five times already. It’s not parks. It’s Linear versus streaming.

2. Dividends would be a negative corollary. They remove capital from a company and distribute it to shareholders. Dividends long term suppress the stock price in lieu capital appreciation in favour of distribution. Share buybacks are meant to appreciate capital (in an equally irrelevant fashion).

3. It’s funny you mention the market is up 241%. Parks are up 220%. Say it with me, it’s linear!

 

[Jrb1979]

1. Of course, dead on, I’m glad you’ve moved on from thinking they are faked. I’ve answered that five times already. It’s not parks. It’s Linear versus streaming.

2. Dividends would be a negative corollary. They remove capital from a company and distribute it to shareholders. Dividends long term suppress the stock price in lieu capital appreciation in favour of distribution. Share buybacks are meant to appreciate capital (in an equally irrelevant fashion).

3. It’s funny you mention the market is up 241%. Parks are up 220%. Say it with me, it’s linear!

Wall Street, Iger and the board don't understand the parks.

As far as linear and streaming goes, streaming IMO will never the the profit machine that Linear was. I don't know how much higher they can raise prices to get to that profitability. They are already at the point where it's getting close to the cost of cable if you have more than 1 service.

 

[BrianLo]

As far as linear and streaming goes, streaming IMO will never the the profit machine that Linear was. I don't know how much higher they can raise prices to get to that profitability. They are already at the point where it's getting close to the cost of cable if you have more than 1 service.

That’s certainly what has been hypothesized by members of this forum. I disagree, but that’s pretty well documented the last few years. Though Netflix has gotten there recently and not found its own ceiling. Disney is a far ways behind in terms of pricing and age of its service.

As per cable, we aren’t there yet. Maybe if you want all the streamers. But two won’t remotely set you back to your 100$ cable package.

Here’s a price guide from 1993. Just Disney channel (which is incomparably less than D+/Hulu) would be over 20$ in today’s currency… and includes commercials.

 

[Sirwalterraleigh]

1. Of course, dead on, I’m glad you’ve moved on from thinking they are faked. I’ve answered that five times already. It’s not parks. It’s Linear versus streaming.

2. Dividends would be a negative corollary. They remove capital from a company and distribute it to shareholders. Dividends long term suppress the stock price in lieu capital appreciation in favour of distribution. Share buybacks are meant to appreciate capital (in an equally irrelevant fashion).

3. It’s funny you mention the market is up 241%. Parks are up 220%. Say it with me, it’s linear!

You give the gamblers at the trough of the NYSE way too much credit for deep dives. They deal in quick scores and riding waves
Do you really think they are saying “well…linear is dying…but after that we’re all in on Disney!”

Really?…they’re already close to the price ceiling of parks

And they don’t see the flow of stream profits that you, Irish, and like 1 other dude here keep predicting

They don’t see it as a particularly good bet

My guess Is they assume that yutz and his $0.25 board will sell…and they’ll be dismantled from the inside out for parts

We have that to look forward to…

 

[Jrb1979]

That’s certainly what has been hypothesized by members of this forum. I disagree, but that’s pretty well documented the last few years. Though Netflix has gotten there recently and not found its own ceiling. Disney is a far ways behind in terms of pricing and age of its service.

As per cable, we aren’t there yet. Maybe if you want all the streamers. But two won’t remotely set you back to your 100$ cable package.

Here’s a price guide from 1993. Just Disney channel (which is incomparably less than D+/Hulu) would be over 20$ in today’s currency… and includes commercials.

View attachment 858080

That's the other thing, people got into streaming not just cause it was cheaper but also to avoid ads. If I'm going to have ads with streaming I will just use one of the free ones.

The biggest issue is that these services all face is cost of producing new content. I'm sorry but a POV of Rise of the Ristance isn't going to cut it.


As good as Disney+ has been doing, , Netflix, YouTube TV have done better.

 

[BrianLo]

You give the gamblers at the trough of the NYSE way too much credit for deep dives. They deal in quick scores and riding waves
Do you really think they are saying “well…linear is dying…but after that we’re all in on Disney!”

Not at all. My point is probably being a bit muddied. I think the stock is priced right today and was priced right 10 years ago. The company makes the same today as they made 10 years ago. It wasn’t priced correctly in 2021, but no one here thinks it was.

Linear looks to be near the end of the line. Not dead, but Radio. I’m just pointing out what died. I think Netflix is a bit too generously priced for how much it makes today, though no one asked.

 

[Sirwalterraleigh]

That’s certainly what has been hypothesized by members of this forum. I disagree, but that’s pretty well documented the last few years. Though Netflix has gotten there recently and not found its own ceiling. Disney is a far ways behind in terms of pricing and age of its service.

As per cable, we aren’t there yet. Maybe if you want all the streamers. But two won’t remotely set you back to your 100$ cable package.

Here’s a price guide from 1993. Just Disney channel (which is incomparably less than D+/Hulu) would be over 20$ in today’s currency… and includes commercials.

View attachment 858080

You’re almost there…now put the picture together and say why this is not a good scenario as constructed…

 

[Jrb1979]

Not at all. My point is probably being a bit muddied. I think the stock is priced right today and was priced right 10 years ago. The company makes the same today as they made 10 years ago. It wasn’t priced correctly in 2021, but no one here thinks it was.

Linear looks to be near the end of the line. Not dead, but Radio. I’m just pointing out what died. I think Netflix is a bit too generously priced for how much it makes today, though no one asked.

Maybe Netflix found their sweet spot in terms of price and subscribers. IMO that should be the goal consistent profit, not try to keep profits higher each quarter.