Disney’s Q2 (Jan/Feb/Mar) FY 2020 Earnings Results Webcast on Tuesday, May 5, 4:30ET

[Slpy3270]

It's interesting to contrast Disney's "confident on the long-term" conference call with that of WWE's "doom and gloom" conference call on April 15, before "Black Wednesday" where dozens of staff were furloughed or laid off and wrestlers released despite the fact that they are still poised to make a decent profit this year (like Disney is despite the park closures, production shutdowns and the like).

 

[MisterPenguin]

This was not how I understood Chapek’s answer. He said it needed to be profitable at the contribution line. That’s not the same thing as profitable AT ALL. It just means that they need to lose less money open than they do closed.

Hmmm... I most definitely could be wrong. I'll take a relisten once audio recording is released, which is usually within one day.

 

[MisterPenguin]

I'm gonna disagree here. Disney products are huge however Disney media always get overshadowed by homegrown Japanese IPs. (Detective Conan, etc) Thats how Netflix was able to break into Japan was due to their licensing of manga/anime rights. Disney+ lack of homegrown asian IPs are going to be its downfall in Asia.

How do you explain the popularity of Disney Tokyo then?

 

[seascape]

As a stockholder I have no priblem giving up my dividend since it is paying for the Cast Members health insurance. I would have liked more information on when Disney Springs is opening and when they believe Disney Plus will be profitable. However, I still believe that Disney Plus will be profitable in the July to September quarter. They should have 63 million customers by the end of June and with Japan launching in the 3rd quarter it should be profitable. I am also looking forward to their additional information on internal transactions. Maybe they will give us an idea on how much more than $300 million a year Disney Plus is paying fir the studio movies. Netflix had a bargin under their contract but given the direct to consumer revenues for the first 2 quarters of the year being just over 8 billion, the Division should bring in another 9 to 10 billion for the year. Remember this, Disney Plus can lose money even if they actually increase the total company's profits.

 

[Sirwalterraleigh]

Yes it would, they get a 10% licensing fee.

Which is nothing

 

[Sirwalterraleigh]

The way I interpreted it was that the capex is down because construction stopped but they haven't canceled anything yet (we are still evaluating...)

She ran through that very quickly...

But it sure sounded like they announced maximum reduction of capex possible...and I think I heard a brief reference 2021 as well?

That’s not gonna sit well with the “for the 50th” crowd.

 

[Quinnmac000]

How do you explain the popularity of Disney Tokyo then?

You are putting words in my mouth. Example, Universal Studios Japan surpasses Toyko Disney Resort attendance certain months. If Comcast released Peacock in Japan due to the popularity of USJ does it mean it will do well, no.

Consumer products does not equal media that is consumed in Japan.

 

[Sirwalterraleigh]

2 weeks of domestic parks closures relates to a little over $500 million cash burn

Yeah...I noticed that

 

[brb1006]

How do you explain the popularity of Disney Tokyo then?

Not to mention the insane popularity of Lilo & Stitch (mainly Stitch and Angle), Chip N Dale (and Clarice), Minnie Mouse, and Marie. Especially Clarice and Marie who have been very prominent at the resort.

 

[brb1006]

You are putting words in my mouth. Example, Universal Studios Japan surpasses Toyko Disney Resort attendance certain months. If Comcast released Peacock in Japan due to the popularity of USJ does it mean it will do well, no.

Consumer products does not equal media that is consumed in Japan.

Stitch is huge in Japan and currently the only Disney character that was able to get his own anime and manga series, same with Marie who gained her own manga in 2012 due to her insane popularity with the Japanese. And the Kingdom Hearts series is very popular in Japan!

 

[hopemax]

Re: CAPEX

At another part of the call Bob said that, “If the project was a good idea before COVID, it will be a good idea after COVID.”

I got the impression they were looking more at delays, not canceled.

 

[MisterPenguin]

Re: CAPEX

At another part of the call Bob said that, “If the project was a good idea before COVID, it will be a good idea after COVID.”

I got the impression they were looking more at delays, not canceled.

There was a reference to "trimming" as well as a commitment to good projects.

 

[GhostHost1000]

The bad thing is, this report is cake compared to the next one. I'm ready for the day when we have a vaccine and we remember the craziness that happened back in 2020.

i think even if we can get to drugs that help fight this and keep people from being hospitalized at all before a vaccine things will become more normal again

 

[GhostHost1000]

Re: CAPEX

At another part of the call Bob said that, “If the project was a good idea before COVID, it will be a good idea after COVID.”

I got the impression they were looking more at delays, not canceled.

that’s how I took that as well - I think the spaceship earth redo tho is put on the back burner. The Epcot redo, some anyways will still go forward just maybe slower than previously planned

 

[bartholomr4]

that’s how I took that as well - I think the spaceship earth redo tho is put on the back burner. The Epcot redo, some anyways will still go forward just maybe slower than previously planned

Just looked at the year end report. Chapek said they cut capital expenditures by 900 million. This is based on an annual budget of $4.8 Billion. So, it looks as though (so far) they have cut what would have been spent during the last three months of shut-down around the world. Not all CAPEX is in the Parks area (a big chunk is though) and not all of it is in the United States. I think your assumption is correct. Seems more like a slow down or temporary pause, if all they are cutting this year is 20% of the Project budget.

Remember, maintenance is not CAPEX, so painting the castle and other regular maintenance is under operating expenses. Cuts here can result in a bigger expense later. I would expect regular maintenance will take a hit, but not as large as the CAPEX expenditures.

 

[flynnibus]

The way I interpreted it was that the capex is down because construction stopped but they haven't canceled anything yet (we are still evaluating...)

Bob C specifically said how they allocate capex is going to be one way they will stop the cash bleed.

 

[flynnibus]

Thank god some analysts asked some meaningful questions related to parks this time and costs..

The follow on to the 1 billion over 2 weeks answer to qualify how the furloughs change that. they didn't answer clearly - but thank god people asked good questions this time...

 

[Sirwalterraleigh]

Re: CAPEX

At another part of the call Bob said that, “If the project was a good idea before COVID, it will be a good idea after COVID.”

I got the impression they were looking more at delays, not canceled.

Certain things make zero sense to “cancel”...too far along.

Every thing else in planning is getting the hard axe.

The economy doesn’t “rock” back...they know what’s coming.

Epcot is gonna be a half %!#*?@...waited too long to start in the “boom”

 

[Sirwalterraleigh]

Bob C specifically said how they allocate capex is going to be one way they will stop the cash bleed.

Yeah...he did.

People won’t want to believe that...but it’s absolutely expected.

That was a given once the “r” word was tossed about

 

[DVCakaCarlF]

I wonder what sunk or fixed costs are part of the profitability formula? It’s not like they stopped paying rent while closed. It’s mostly labor and proportional increases in utilities.

At what point do guest numbers meet or exceed costs to turn a profit or break even?