News Dismal Q3 Earnings

[mikejs78]

You're very good at being wrong consistently.

Great argument there...

Honestly the fact that you and most people here think that the analyst miss was about parks shows that you really don't know what you're talking about.

The first quote was your response when I announced a week ago that Q revenue would be down, stocks would be impacted, and domestic parks were the reason. The second quote is you continuing your pattern.

Thanks for this... Some items of interest from their earnings report last night, which is available now at SEC.gov include the following notes to the financial statement.

Last year through 9 months Disney reported $5.60 per share adjusted (as a reminder the share count was lower because the 21CF transaction hadn't closed. The comparable share results for 9 months this year is $5.98. (increase of 38 cents a share) Disney appeared to throw the kitchen sink in taking adjustments to the earnings to put alot of items behind them. Iger suggested this morning on CNBC the next quarter will include similar charges.

For grins, the adjustments outlined in the detailed report include:

• 43 cents a share for "Amortization of 21CF and Hulu intangible assets due to transaction closing and change in control of Hulu" (Basically the company is writing off the value of the film library quicker than 21CF had).
• 42 cents a share for "Restructuring and Impairment Charges" which is made up of Severence and equity based compensation related to layoffs (total of $869 Million in payments to severed employees). This is a pool to be used over two years, and is a one time charge to earnings
• 26 cents a share for "Impairment of equity investments" which represents moneys Disney will have to put into Hulu, that Comcast would have under the old ownership arrangement.
• Disney paid the US government $6.2 billion in tax obligations that arose from the spin-off of Fox from 21CF.

There isn't any discussion of Galaxy Edge impacting the forecasted earnings. While there may have been some negative impact of the launch at DL, in the grand scheme of things, the impact to revenue (over $50 Billion dollars in 9 months) is not material, nor is it the root cause of the earnings disappointment. The company is investing in a business (Disney +) which will not be returning revenue for another 90 days. Once this revenue starts to show up, the annual impact should be material, and it is reasonable to think the earnings will show up as promised.

One additional item from the balance sheet which is interesting to me, the cash investment into the parks and resorts (9 months to date this year vs last year) is $3.567 billion this year vs $3.264 billion last year.

 

[MrPromey]

Fair enough, but while I'm sure the bulk of the passholders live within a reasonable commute from the park, I can't imagine they all do. And again, it supposes the increase in single-day admissions won't be sustained.

Since I have much less knowledge of Disneyland passholder behavior, especially with spending, are they prone to skip Blue Bayou or the Lamplight Lounge? It seems like I see a lot of vloggers eating there.

I don't know about Disneyland Pass-holders but as a WDW passholder, I can tell you I spend a lot less than a vacationing guest on food/drink and that's with a near 2 hour drive.

With quick-service/snack/drink pricing and quality where they are at WDW, you can bet we pack a small soft-sided cooler and bring snacks. We're also very well acquainted with the casual and fast-food options near to WDW.

Sure, we tried the new food at Pandora once. It was fun.

We have not eaten there since though as it's difficult to justify the spend.

It isn't that we don't ever buy food or drinks in the parks but I'd say it is on average, less than once per visit and it is likely to be a single purchase of a pretzel or a popcorn or something along those lines.

No sane person can go regularly and spend what they charge for food of the quality they are serving and dining areas of the caliber they offer when it comes to fast-service (Beast's Castle at lunch being the difficult-to-get-into semi-exception) but when you're on vacation from out of town, you don't have a lot of choice.

I wish it made sense to not lug a heavy backpack with frozen drinks and that the food quality wasn't worse than McD's at roughly 200% the price with abysmal dining locations that usually feel like you're being sandwiched in at meal times but it doesn't. Every time I walk by the smaller almost never-open restaurants in the MK, I think about that.

For the nicer places, six month out reservations aren't common for us since we don't plan a day trip that far in advance so most of those options aren't open to us when we visit. I doubt Blue Bayou and Lamplight suffer from quite so much traffic but I'm sure there is typically a lot less seating than there are annual pass-holders to fill it in an average day.

If anything, due to location and much easier access to alternatives, I'd have to imagine this kind of behavior is more common with DL rather than less since WDW makes it nearly impossible without your own car and knowledge of the surrounding area and I figured it out for one meal easy enough during my stay there (DL) without my own transportation.

 

[danlb_2000]

Star Wars doesn't have the benefit of dozens of unique (but still recognizable) characters with pre-installed backstories and legends which can be packaged in so many different ways to compliment so many story arches. Star Wars is still relying on one main arch and set of characters for success.

Just because it works for the MCU certainly doesn't mean it'll work for Star Wars. Even the Harry Potter Universe has taken a slow beating with each Fantastic Beasts film. If they were pumping out two of those every year the franchise would be dead.

MCU has a luxury no other franchise really has and can't be used as a comparison to anything else.

I would disagree with that. Star Wars has ton of characters from the movies, TV shows, books etc. Yes, these may not be known to the general public, but I would bet most people seeing Black Panther or Guardians of the Galaxy had little to no idea who these characters were before seeing the movie.

 

[danlb_2000]

The number of people giving authoritative accounts of what has been going on with Kathleen Kennedy, Alan Horn, JJ Abrams, etc, and how the sequel trilogy strategy developed, all while not having a clue... well, it's impressive.

Well, then why don't you fill us in Mr. know-it-all?

 

[Villains0501]

I think Disney’s rationing was sound.
But you “best not miss” and lucasfilm has done a horrible job.

The EU was a mess...George had pimped it to anyone for 25 years...so that had to be tied off.

BUT...don’t do a reboot with boring characters and then crap that angers a portion of the fanbase.

This is NOT THAT HARD

Oh, no doubt about the messiness of the original EU. As I said, take inspiration from the strong points, repackage it, and flush the rest. But why they felt the need to reboot Star Wars as if it were some arcane, long forgotten relic from the past?

 

[Villains0501]

The number of people giving authoritative accounts of what has been going on with Kathleen Kennedy, Alan Horn, JJ Abrams, etc, and how the sequel trilogy strategy developed, all while not having a clue... well, it's impressive.

I'd love to get some insider scoop! That is, before the inevitable tell-all is published.

 

[Sirwalterraleigh]

I'd love to get some insider scoop! That is, before the inevitable tell-all is published.

They’ll turn the book into a live action remake

 

[Villains0501]

They’ll turn the book into a live action remake

Would that then make Kathleen Kennedy an official Disney Villain? Or maybe JJ if she's the protagonist? Either way, neither can hold a candle to the ultimate Disney Villain, Chape-- yikes, I mean Chernabog!

 

[MrPromey]

I believe what GE proves in Disneyland is a regional themepark dependent on annual passholders and blocking them out hurts attendance. That said the thing I hope Disney learns from this is to build major tourist dependent attractions at WDW first. Disneyland gets a good amount of tourists but nowhere near what WDW gets.

The big thing to remember is that passholders don't spend as much on every visit. That does not mean they won't buy a Lightsaber or Droid, but that they may buy one but visit 10 times so per cap is lower even though they make more money off the passholder than they do a one day visitor. Six Flags on their conference calls alway say their members spend more money on merchandise than do one day visitors. The one big thing Disney can learn from Six Flags is how to track what each passholder buys. Six Flags give a discount to their annual members but to get it your card has to be scanned. Disney could do this with magic bands, automatically take off the discount and charge the band. They could then offer special deals to members who spend more.

As WDW APs, we're far more likely to spend on merch than food/drinks.

And I think you're absolutely right that if they were tracking our purchases, they'd realize that's probably normal.

WDW offers AP discounts but it's the absolute dumbest thing. All of us have Magic Bands but they also have to issue cards that we show at the registers to get our discounts because they have no way to verify our AP status with the Magic Bands. Those touch spots are for pay-only and can't convey that info... So they know an AP discount was applied, I guess, but they don't know what level AP it was or who it was - just that some AP got a discount on something or other because all we do is flash the card - no scan or anything.

Since there's no discount for fast-service or snacks, they don't know what we do or don't spend, there, either.

For a company that's all about data, seems like a huge loss to me.

 

[gmajew]

Anyone complaining about the raising cost of products needs to look around... Every business is slowly raising prices... Increase in labor cost plus the shortage of labor is driving this number up way way faster then

 

[WDW Pro]

Copy and pasted quotes non-stop with no contribution.

The message here is "trust fully the words of anonymous forum posters over Bloomberg and other business news articles."

"As expected, profits were hurt by integration costs, but they were also negatively impacted by weak performances by the Fox movie studio and Disney's domestic parks." -- https://www.fool.com/investing/2019/08/06/disney-earnings-fall-on-fox-related-growing-pains.aspx

Well, then why don't you fill us in Mr. know-it-all?

Ask away and I'll answer if I can. I've dealt significantly with Lucasfilm over the past decade.

 

[seascape]

I believe it was on the interview on CNBC that Iger said he doesn't expect a ticket price increase any time soon. So maybe I will get to renew my pass at current prices or even get an extra DVC discount like they had a few years ago. I love the Platinu Plus pass because I dont have to worry about being blacked out.

 

[mikejs78]

I would qualify this. TDA pencil pushers are panicked (about Q3’s numbers and how to improve Q4 while updating their resumes) but there is too much riding on this to actually admit they made a mistake and reverse course. So they’ll cut spending instead. I’m sure actual changes will be explored once RotR opens, if necessary.

People wonder why DHS didn’t have changes opening 3 months after DL’s land, but it’s because they were focused on just opening the land and will be focused on getting RotR and MMRR open for the next 8 months. Then they can fix mistakes. Just like how Toy Story Land was forced to suffer without shade (an easy fix) for almost a year.

This rings true to me...

 

[MisterPenguin]

The message here is "trust fully the words of anonymous forum posters over Bloomberg and other business news articles."

"As expected, profits were hurt by integration costs, but they were also negatively impacted by weak performances by the Fox movie studio and Disney's domestic parks." -- https://www.fool.com/investing/2019/08/06/disney-earnings-fall-on-fox-related-growing-pains.aspx





Ask away and I'll answer if I can. I've dealt significantly with Lucasfilm over the past decade.

Is Kennedy in danger of being fired?

 

[mikejs78]

The message here is "trust fully the words of anonymous forum posters over Bloomberg and other business news articles."

"As expected, profits were hurt by integration costs, but they were also negatively impacted by weak performances by the Fox movie studio and Disney's domestic parks." -- https://www.fool.com/investing/2019/08/06/disney-earnings-fall-on-fox-related-growing-pains.aspx

The message here is to read the SEC filing rather than rely on people who claim to know it all on the internet - that includes you, me, and even Bloomberg/Motley Fool.

But you'd just rather prognosticate.

 

[Villains0501]

The message here is "trust fully the words of anonymous forum posters over Bloomberg and other business news articles."



Ask away and I'll answer if I can. I've dealt significantly with Lucasfilm over the past decade.

Can you go into any detail about the development of the ST? Was there a road map in place for the trilogy or was it up to each subsequent "auteur" to continue the story in their own fashion, like a bad game of improv. Is Lucasfilm rethinking their commitment to Benioff and Weiss in response to the Game of Thrones backlash? Thanks in advance, friend!

 

[Mouse Trap]

I would disagree with that. Star Wars has ton of characters from the movies, TV shows, books etc. Yes, these may not be known to the general public, but I would bet most people seeing Black Panther or Guardians of the Galaxy had little to no idea who these characters were before seeing the movie.

Sure, but the central story of Star Wars has always rested on the shoulders of only a few characters. The MCU is not reliant on that.

Either way, the MCU still has a luxury no other franchise has. No other franchise in history has been able to pump out so many successful films at such speed with little slowdown.

 

[WDW Pro]

Can you go into any detail about the development of the ST? Was there a road map in place for the trilogy or was it up to each subsequent "auteur" to continue the story in their own fashion, like a bad game of improv. Is Lucasfilm rethinking their commitment to Benioff and Weiss in response to the Game of Thrones backlash? Thanks in advance, friend!

JJ created a broad map for the ST, though he left a great deal of wiggle room for subsequent directors. Per Kathleen Kennedy and Kiri Hart, however, Rian Johnson was allowed to jettison all of JJ's outline and completely write his own script without regard to the original binding narrative. Trevorrow objected to this, as well as the removal of Luke Skywalker from his finale, and after many protests to stick with JJ's original script... he was canned. JJ was brought back in out of sheer panic as the firing of Trevorrow and Iger and Horn's first negative response to their views of TLJ came rather close to each other. Subsequent changes to JJ's reviesed Ep 9 script occured this past January and again in May after directives were given from the top to "fix" Luke Skywalker in Ep 9. This has resulted in reshoots all the way until September with post-production going until at least late October. This movie will be right down to the wire.

As for Benioff and Weiss, I have no idea because I no longer have interactions with Lucasfilm employees on a regular basis, and the contacts I do have would be extremely hush hush about such a thing given that Lucasfilm makes a habit of providing false info to employees in an effort to track leakers.

 

[Mouse Trap]

...I get why he would have said “no”
That is full of assumption there.

She will be gone immediately after iger...at a minimum.

It's not "full of assumption". Iger is on camera saying he "read the script for TLJ flying back from TFA premiere" during a red carpet interview.

 

[Villains0501]

JJ created a broad map for the ST, though he left a great deal of wiggle room for subsequent directors. Per Kathleen Kennedy and Kiri Hart, however, Rian Johnson was allowed to jettison all of JJ's outline and completely write his own script without regard to the original binding narrative. Trevorrow objected to this, as well as the removal of Luke Skywalker from his finale, and after many protests to stick with JJ's original script... he was canned. JJ was brought back in out of sheer panic as the firing of Trevorrow and Iger and Horn's first negative response to their views of TLJ came rather close to each other. Subsequent changes to JJ's reviesed Ep 9 script occured this past January and again in May after directives were given from the top to "fix" Luke Skywalker in Ep 9. This has resulted in reshoots all the way until September with post-production going until at least late October. This movie will be right down to the wire.

As for Benioff and Weiss, I have no idea because I no longer have interactions with Lucasfilm employees on a regular basis, and the contacts I do have would be extremely hush hush about such a thing given that Lucasfilm makes a habit of providing false info to employees in an effort to track leakers.

Wow, what a circuitous route this trilogy has taken. Perhaps the willingness to toss out JJ's treatment came in response to criticism that TFA felt too much like a rehash of ANH and that the next film should be more off the wall? In any event, it didn't really pan out well. Do you have any knowledge about the extent of Palpatine's role in the new film? I know Kennedy and JJ said it was always the plan to bring him back (which I find hard to believe seeing as he was barely mentioned in the previous two films - you'd think Vader ran the Empire all by his lonesome). Totally understand if you can't say anything.

What about the decision to not revise Leia's fate in VIII following Carrie Fisher's passing? Seems like it would have been easier to conclude Leia's arc in VIII rather than relying on archival footage for IX.

And that last bit about plugging leaks is, ironically, right out of Game of Thrones.