Disney 2013 Earnings Call

[hpyhnt 1000]

Definitely informative. Rasulo admitted MM+ wouldn't be making money in 2014, and Iger (essentially) admitted that DAK is a half-day park.

And yet, even after basically acknowledging this, theres been little urgency to address the issue. The park has only been around since 1998. Even now, Avatarland and (apparently) the associated nighttime entertainment won't be debuting until 2017, 4 years from now and a good 6 years after the initial announcement.

Also, the multi-billion dollar boondoggle that is MyMagic+ shows no signs of profitability in the coming year? Gee, no one could have seen that coming. Its revealing they didn't even try to spin or sugar coat that mess; how bad are things?

I'm amused by the reports that Iger was irritated by the questions about Comcast's spending. In his defense, Iger has spent many billions...difference is, Iger spent it on a failure.

 

[luv]

Disney pours billions of dollars down the drain. They spend huge sums on things they don't need and refuse to spend small amounts on things that make a difference.

 

[GoofGoof]

"Higher operating income for the quarter was primarily due to increased guest spending, attendance and occupied room nights at Walt Disney World and increased guest spending at Disneyland. These increases were partially offset by higher costs at both resorts and lower attendance at Disneyland Resort"

They did credit some gains for the quarter on DVC sales at Grand Floridian and admitted that My Magic+ was a key driver of higher costs at WDW. There were several good parks related questions on the call. They danced around the my magic questions without giving any more info. Iger got snippy when someone asked if there was room for both WDW and Universal in the FL market. There was also a reference to Avatarland being the Carsland of DAK. Not just a single land but a transformation of a park into a full day and night experience. Interesting question on capex. Disney reported that they expected capex for domestic parks would be about the same in 2013 as 2014. The question asked was what exactly will you be spending that money on. Is there a project we haven't heard about yet? The answer was finishing FLE and the start of work on Avatarland plus the regular capex for maintenance and refurbs. Someone asked about the prospect of new cruise ships and the answer was there were not any being considered at this time.

What does all of this mean for us? Hard to say. It's a little disappointing that DLR couldn't add to its growth from Carsland. Uni had 2 years of double digit gains following Potter. I don't know if the drop off at DCA is a good sign for future projects like StarWars or a Cars/Pixar Land for DHS. They are expecting to see gains from MyMagic plus starting in 2014. That should be interesting to see.

 

[GoofGoof]

Here's a link to the earnings call transcript. It's a good read, but listening to the call was worth the time just to hear Iger get flustered on the Universal question.

http://finance.yahoo.com/news/walt-disneys-ceo-discusses-f4q-001205525.html

 

[George]

Yep, because Disney thinks it can add thousands of more DVC units at WDW ...amazing.

And I still wait for the DVC revolt that never happens.

I'm not sure what form a revolt would take, but Disney has inadvertently created a community of far flung locals over the last 20 years. They got many of us back in the parks with heavily discounted PAPs that could be activated at any point this calendar year. The question is - Will FLE be enough to get people to renew? I don't think it will be. At some point will someone say, "you know, if spent the money and invested it correctly, these people would spend many on full freight tickets?" I would also think they've got to be close to market saturation on the timeshares. The prices they charge per point seem mildly insane at this point too.

Jason Garcia's tweeted quotes from this call are hilarious.

Avatar touted as DAK's Cars Land? Quietly pushing off the roll-out of MM+? Iger getting irritated when asked about Comcast's spending?

Sounds like comedy gold.

Giving credit where credit is due, Mr. 74 talked up the shareholders meeting in Arizona and I listened to if for the first time ever. It was beyond entertaining. I was actually listening to the audio and laughing and laughing.

 

[jt04]

How bout those Red Sox!

Oh yeah, just wait til those Star Wars dollars start rolling in.

Mouse is gonna have to invest in the parks in a big way. No way around it.

All is proceeding as I have foreseen.

 

[danlb_2000]

How bout those Red Sox!

Oh yeah, just wait til those Star Wars dollars start rolling in.

Mouse is gonna have to invest in the parks in a big way. No way around it.

All is proceeding as I have foreseen.

You had foreseen Disney getting the Marvel rights back from Uni within months of the acquisition, so only some of the things you have foreseen are proceeding.

 

[jt04]

You had foreseen Disney getting the Marvel rights back from Uni within months of the acquisition, so only some of the things you have foreseen are proceeding.

I was employing my super secret special double-reverse psychology ploy against NBCUNIVESAL. Worked like a charm.

 

[sweetpee_1993]

Disney pours billions of dollars down the drain. They spend huge sums on things they don't need and refuse to spend small amounts on things that make a difference.

You could've just been referring to the high dollar frontmen who occupy the WDC throne(s). Humorous.

 

[Darth Sidious]

Yep, a film that is widely felt to be a mess in the business, a film that Kennedy and Lucasfilm desperately wanted another 18 months for.

But understand this, Iger is looking at only his legacy in the short term. This SW film could mAke The Phantom Menace look like the best film of all time and it will still make billions.

Much like Shanghai DL, Iger wants to shine in the spotlight with his elephant-sized ego and be lauded for all his acquisitions and the way he has grown the BRAND.

Watching him puke forth talking points to Maria B on CNBC was a bit much. His unbridled love of everything Marvel ...well, except for that huge gambling business on the side that only the New York Times has had the guts to question and write about ...is just sickening. He seems to not get that the superhero business is cyclical and riding a crest right now.

All of the great IP that Disney already has and all he really cares about is leveraging Marvel and Lucas creations.

Oh, and stock is down almost three percent on this great earnings report.

Well the man does have familial ties to Marvel.

 

[TubaGeek]

I don't know why I've been worrying about the state of the parks lately. Clearly, based on the numbers, Disney is the best.

 

[PhotoDave219]

How bout those Red Sox!

Oh yeah, just wait til those Star Wars dollars start rolling in.

Mouse is gonna have to invest in the parks in a big way. No way around it.

All is proceeding as I have foreseen.

Yeah but no CapExp in 2014 beyond Shanghai - Meaning any DHS makeover wont start until FY2015 at the earliest.

Aint that a ****.

 

[Jimmy Thick]

Hilarious watching people make up things about stuff they don't know anything about, no really.


Oh, Iger set the company up for at least oh 20-30 years into the future, will just lurve to see that stock price on the day the next Star Wars film opens, no really, the film will be just "So terrible", * Jimmy rolls eyes *, while it makes over a billion guaranteed.

And in the present day, Comcast can spend it's millions while both of their parks can't outdraw MK combined.

Ha.


Jimmy Thick- If no one goes to DHS does it still make a sound? Wait, the sound of dollars...

 

[ford91exploder]

Yep, because Disney thinks it can add thousands of more DVC units at WDW ...amazing.

And I still wait for the DVC revolt that never happens.

Oh it's brewing - and will explode shortly mainly over Disney apparently inflating maintenance fees, mainly housekeeping where a few of us have noticed that a high end midtown Manhattan timeshare charges 2/3 LESS for housekeeping than BLT and facilities are of equivalent size. Leaving us to believe that we the members are footing the bill for the ENTIRE housekeeping expense for BLT and not just the services delivered to DVC members.

 

[RSoxNo1]

How bout those Red Sox!

Oh yeah, just wait til those Star Wars dollars start rolling in.

Mouse is gonna have to invest in the parks in a big way. No way around it.

All is proceeding as I have foreseen.

Aw crap, jt is a Red Sox Fan. I'm so conflicted now.

 

[ford91exploder]

"Higher operating income for the quarter was primarily due to increased guest spending, attendance and occupied room nights at Walt Disney World and increased guest spending at Disneyland. These increases were partially offset by higher costs at both resorts and lower attendance at Disneyland Resort"

They did credit some gains for the quarter on DVC sales at Grand Floridian and admitted that My Magic+ was a key driver of higher costs at WDW. There were several good parks related questions on the call. They danced around the my magic questions without giving any more info. Iger got snippy when someone asked if there was room for both WDW and Universal in the FL market. There was also a reference to Avatarland being the Carsland of DAK. Not just a single land but a transformation of a park into a full day and night experience. Interesting question on capex. Disney reported that they expected capex for domestic parks would be about the same in 2013 as 2014. The question asked was what exactly will you be spending that money on. Is there a project we haven't heard about yet? The answer was finishing FLE and the start of work on Avatarland plus the regular capex for maintenance and refurbs. Someone asked about the prospect of new cruise ships and the answer was there were not any being considered at this time.

What does all of this mean for us? Hard to say. It's a little disappointing that DLR couldn't add to its growth from Carsland. Uni had 2 years of double digit gains following Potter. I don't know if the drop off at DCA is a good sign for future projects like StarWars or a Cars/Pixar Land for DHS. They are expecting to see gains from MyMagic plus starting in 2014. That should be interesting to see.

Growth is a Wall St. disease, It used to be enough that a company made a PROFIT but now profits have to GROW by some arbitrary number. This is what is WRONG with American Business, Look at Asia groups of related companies many of which are making small profits make up huge and powerful combines because they are banking those profits whist american companies are frittering away money on mergers of which 80% destroy shareholder value over 5 year periods.

 

[TubaGeek]

Hilarious watching people make up things about stuff they don't know anything about, no really.

Oh, Iger set the company up for at least oh 20-30 years into the future, will just lurve to see that stock price on the day the next Star Wars film opens, no really, the film will be just "So terrible", * Jimmy rolls eyes *, while it makes over a billion guaranteed.

And in the present day, Comcast can spend it's millions while both of their parks can't outdraw MK combined.

Ha.

Jimmy Thick- If no one goes to DHS does it still make a sound? Wait, the sound of dollars...

Congrats, the Disney parks can make money. Believe it or not, that's not the main concern of most people on this forum.

 

[GoofGoof]

Oh it's brewing - and will explode shortly mainly over Disney apparently inflating maintenance fees, mainly housekeeping where a few of us have noticed that a high end midtown Manhattan timeshare charges 2/3 LESS for housekeeping than BLT and facilities are of equivalent size. Leaving us to believe that we the members are footing the bill for the ENTIRE housekeeping expense for BLT and not just the services delivered to DVC members.

GFV seems to be selling pretty well. The DVC resale market is up too. If there are unhappy owners out there there seems to be a steady stream of customers willing to replace them.

 

[ford91exploder]

GFV seems to be selling pretty well. The DVC resale market is up too. If there are unhappy owners out there there seems to be a steady stream of customers willing to replace them.

I was happy with DVC purchase too until NGE came along...

 

[WDW1974]

Jason Garcia's tweeted quotes from this call are hilarious.

Avatar touted as DAK's Cars Land? Quietly pushing off the roll-out of MM+? Iger getting irritated when asked about Comcast's spending?

Sounds like comedy gold.

Yes, I doubt that analyst will ever be allowed to ask a question again. Disney likes when people follow its script and only its script.

Iger can't actually handle questions that he doesn't have answers drilled in his head for, another reason why he is a very weak leader. And tough questions about the competition. Enough to have him running for Willow's skirt.