Disney made almost 1 billion in "theme-park profit" during the last quarter.

[Siren]

http://www.latimes.com/business/la-fi-walt-disney-record-attendance-20160209-story.html

The force is strong with Disney.

The blockbuster "Star Wars: The Force Awakens" was largely responsible for Walt Disney Co.'s record profit for the first fiscal quarter, but Disney executives also credited the space opera for the record attendance at the company's domestic parks.

The Burbank media giant on Tuesday reported net income of $2.88 billion in the quarter that ended Jan. 2. That was a 32% jump compared with the same period a year earlier. Revenue rose 14% to $15.2 billion.

The rosy financial report was supported by a 10% increase in attendance at the company's domestic parks and a 7% rise in per-capita spending on food, drinks, admission and merchandise, Disney executives said.
Per-room spending at theme park hotels rose 9% for the period, while occupancy rose by 3%, to 92%, according to Disney.

At Disneyland, several existing attractions were overhauled, starting in November, to add a new "Star Wars" flair, both to boost crowds and to pique interest in the new movie. For example, Space Mountain, an iconic indoor roller coaster that opened in 1977, was upgraded to include new special effects and renamed "Hyper Space Mountain."

Another reason for big crowds at Disneyland was the park's 60th anniversary celebration, which launched in May and included a revamped nighttime parade, fireworks show and fire-and-water extravaganza.

"Since December, more than 6 million guests have experienced new and refreshed 'Star Wars' attractions and features in our parks," Disney's Chief Operating Officer Thomas Staggs said during an earnings call.

Disney continues to invest in its parks, with plans to draw even bigger crowds.

Groundbreaking is expected soon on the first major expansion of Disneyland, a 14-acre "Star Wars" area in the northwest corner of the park. A "Star Wars" land is also planned for Disney's Hollywood Studios at the Walt Disney Resort in Orlando, Fla.

A new themed land, "Pandora -- The World of Avatar," is expected to open next year at Disney's Animal Kingdom in Orlando, and Disney has set a June opening for its $5.5-billion resort in Shanghai, the first Disney park on mainland China.

"While there are start-up costs this year, you can expect that that's going to drive growth for parks and resorts for many years to come," Disney Chief Executive Robert Iger said.

Disney Parks are booming. I literally cannot keep up with all of this amazing news! Disney Parks attendance is up by 10% -- Disney hotel room occupancy is at 92% -- Disney just experienced the greatest quarter in the history of the company and has been named 'The Most Powerful Brand in the World'. Not including all of the box office success Disney had last year and this year. Just wow!

 

[raven]

....thus the reason for no more "off seasons", extensive block out dates, FP+ limitations, extremely long lines and strollers as far as the eye can see.

 

[stretchsje]

It's not good news if you like low prices.

 

[BisonLion]

Wallstreet is dinging them for that. I'd say the Disney Company is about as healthy as they've ever been. ESPN is just experiencing something all traditional media is experiencing. There are so many ways to get your scores, highlights, and information now, people don't plan to watch Sportscenter.

Wallstreet always does this. They ignore the fact Disney destroyed top and bottom line estimates and every business is running on all cylinders and instead focus on subscriber counts and margins at ESPN. Disney's quarter was incredible and essentially no one cares.

The same thing happened to Apple. The had the best quarter in corporate history, beat top and bottom line, sold more iPhones than last year despite selling an incremental upgrade (iPhone 6s) and all Wallstreet can focus on is that it wasn't even more iPhones sold. Growth isn't fast enough. It's insane.

Actually, this is how all stocks work for a lot of companies that don't pay dividends (and some that do). (Not a Disney stockholder, so not sure in their case). Apple's stock price is not based on meeting or exceeding budgets, because it is tech company, their stock price is based on growth and eventual net worth (the only way investors can recoup their investment since there is no dividends). It is why some companies can lose money, but their stock goes up (because growth and potential is what is building the company, and reinvestment is key into creating new innovations), and others can exceed profits and go down (there could be questions about whether the company is capitalizing on profit and minimizing reinvestment and a slow down in innovative culture). Sorry to go off on a tangent, just sometimes when people say "Wall Street is doing xxx or yyy" it bugs me as there is a lot that goes into stock valuation, more so than simply earnings and profits.

 

[hpyhnt 1000]

Disney Parks are booming. I literally cannot keep up with all of this amazing news! Disney Parks attendance is up by 10% -- Disney hotel room occupancy is at 92% -- Disney just experienced the greatest quarter in the history of the company and has been named 'The Most Powerful Brand in the World'. Not including all of the box office success Disney had last year and this year. Just wow!

MM+ paying dividends! Absolute stoke of genius to use $1+ billion to put FP+ on rides like Journey into Imagination and Stich's Great Escape. Why build "new" "rides" when you can just funnel people into already existing, lackluster ones, am I right?

And, yeah, maybe we should have focused more on quickly fixing the bus system and monorails, or making sure custodial is adequately staffed, but hey, aren't those matching Magic Bands for your whole family just magical???

Right...?

 

[BoarderPhreak]

Why fix Epcot if it "ain't broke" right? *sigh*

 

[Chef Mickey]

Actually, this is how all stocks work for a lot of companies that don't pay dividends (and some that do). (Not a Disney stockholder, so not sure in their case). Apple's stock price is not based on meeting or exceeding budgets, because it is tech company, their stock price is based on growth and eventual net worth (the only way investors can recoup their investment since there is no dividends). It is why some companies can lose money, but their stock goes up (because growth and potential is what is building the company, and reinvestment is key into creating new innovations), and others can exceed profits and go down (there could be questions about whether the company is capitalizing on profit and minimizing reinvestment and a slow down in innovative culture). Sorry to go off on a tangent, just sometimes when people say "Wall Street is doing xxx or yyy" it bugs me as there is a lot that goes into stock valuation, more so than simply earnings and profits.

Yeah, fully aware of how investors value growth. I was a finance major at Wharton.

AAPL does pay dividends, like a lot of tech, so not sure what you're talking about. Small tech typical doesn't pay a dividend because they are in growth mode. Big Tech (IBM, MSFT, QCOM, ORCL, AAPL) all pay dividends because they are mature companies. AAPL grows faster than all of those, btw.

What I'm saying is despite all of that, Wallstreet tends to overvalue future earnings (pie in the sky) such as AMZN and undervalue companies that make real money, particularly in bull markets. Now that the market has contracted, you see AMZN went from 700 to 500 in about a month. High flying companies crash hardest when there are no earnings to back up the share price.

This is why AMZN traded at 500 times earnings and DIS trades at about 20. AAPL trades about 10 times earnings and grew EPS faster y/y than GOOGL (Alphabet) which trades at 40 times earnings. Even MSFT trades at 35 times earnings and grew about 7% y/y. AAPL grew EPS ~30% y/y.

For perspective, AAPL made $24.1 B in operating income last quarter. AMZN made $1b. DIS made $3.9B. GOOGL made $4.8b.

My entire point was that companies making real money (what every company strives to be) get unfairly beaten down in the short term too often on nit picking items. I think it's safe to say AAPL is a healthy business. DIS is a healthy business. AAPL just had the best quarter in corporate history for a non government company and the stock was beaten down 6% because they wanted more iPhones. The market will correct, but it can stay irrational a long time.

 

[BubbaQuest]

I just read their annual report. It's operating income ($981M).

Operating Income is prior to removing taxes and interest. Net Income is a true measure of profit because it's after taxes and interest. Also know as EBIT. Earnings before interest, taxes.

I find the "amazing" profit numbers a little confusing. This is from the Wall Street Journal:

At Disney’s theme parks business, 10% growth in attendance and 7% growth in spending at domestic theme parks led to a 9% increase in revenue to $4.28 billion and 22% increase in operating income to $981 million.

If they had a 10% growth in attendance but only a 7% growth in spending and a 9% increase in revenue, isn't that a bad thing? I thought the goal was to get more than a 1:1 revenue increase with new guests.

More troubling to me is the 9% increase in revenue vs a 22% increase in operating income. Doesn't that mean that a majority of the profit came from cutting operating expenses, not increasing revenue?

Closed attractions and layoffs FTW!

 

[DocMcHulk]

Sadly, I think that high dollar amount means nothing to them.

well, it DOES mean something to them. i t means they didnt make NEARLY enough and need to make more cuts.

 

[Uncle Lupe]

I think people would ponder the profit margin of their favourite beer company if the reduced the alcohol content and charged more, watered down their offerings if you will. I would hazard a guess that its not the sizeable margin itself that is begrudged rather than the margin is there at a time when a company that positions itself as a high end brand has several properties within the brand that struggle to attain that high water mark, due in part to reduced care & maintenance and a failure to invest at a time when interest rates remain historically low.

All of course in my humble subjective opinion.

Wow! That is the most coherent post of yours that I've read. Didn't have to Google search anything.

 

[Chef Mickey]

I find the "amazing" profit numbers a little confusing. This is from the Wall Street Journal:


If they had a 10% growth in attendance but only a 7% growth in spending and a 9% increase in revenue, isn't that a bad thing? I thought the goal was to get more than a 1:1 revenue increase with new guests.

More troubling to me is the 9% increase in revenue vs a 22% increase in operating income. Doesn't that mean that a majority of the profit came from cutting operating expenses, not increasing revenue?

Closed attractions and layoffs FTW!

It's hard to make those judgments without really digging in to the numbers. Remember, operating income removes COGS but also depreciation. I haven't looked what their depreciation was q/q or y/y. COGS has a lot of moving parts too...it could mean some wage cost went down, but there is seasonality in that and could also mean some of their other costs decreased.

 

[Pumbas Nakasak]

Wow! That is the most coherent post of yours that I've read. Didn't have to Google search anything.

Im obviously out of practice, or tequila.

 

[raven]

I'm not sure it can be that fast, but I understand your point and your frustration.

Star Wars Land will take 2 years and 11 months from groundbreaking to grand opening in Anaheim because of the huge amount of regulations, inspections and extra construction steel/fasteners/bracing/design needed to build large structures in earthquake prone Southern California.

Cars Land broke ground in Anaheim July, 2009 and grand opened June, 2012; 2 years and 11 months. Star Wars Land broke ground in Anaheim January, 2016 and is strongly rumored to grand open December, 2018; 2 years and 11 months.

That's the timetable and excuse for Anaheim. More importantly, I have no idea why it would take longer to build Star Wars Land in Orlando. They have far fewer regulations and a political environment where Disney's relationship with inspectors and approvals from Reedy Creek and Tallahassee are much cozier than anything Disney has in Anaheim and Sacramento.

There doesn't appear to be a good excuse for the delayed timetable in Orlando. Except for money.

Meanwhile at Six Flags, Cedar Point, Busch Gardens, Sea World and other parks around the world attractions open by their next season.

well, it DOES mean something to them. i t means they didnt make NEARLY enough and need to make more cuts.

It"s because they won't cut their own bonus's at the top of the chain.

 

[TP2000]

Meanwhile at Six Flags, Cedar Point, Busch Gardens, Sea World and other parks around the world attractions open by their next season.

To be fair, recent history has only Sea World coming close to anything Disney might do with their Empire Of The Penguin exhibit/ride. That was 18 months from announcement to opening in May, 2013, with about 14 months of construction. Although the facade and facility of that attraction was very modest compared to Disney's recent work with Cars Land, Avatar Land, Star Wars Land.

The catalog-purchased roller coasters your local Six Flags or Cedar Fair park puts up over the winter are not at all comparable to anything Disney would do.

But with Sea World, we are comparing a 4 acre land with a short and underwhelming dark ride, a gift shop and one restaurant, that took 14 months to build this...

To the project Disney did at this same time, Cars Land; a 12 acre land with a massive E Ticket ride that gets rave reviews, plus two smaller spinner rides, three gift shops, a restaurant, a food court and a snack bar that looks like this...

Avatar Land is only slightly smaller, and Star Wars Land will be slightly bigger than Cars Land's 12 acres. I can't imagine this type of project taking any less than 24 months from groundbreaking to grand opening, no matter how much money you throw at it. Disney seems to tack on an extra 9 to 11 months onto these projects however.

But really, no one in American theme parks is attempting to do anything close to what Disney is doing in their parks with Cars Land, Avatar, Star Wars, etc. We're two years and 10 months away from seeing what they cooked up for Star Wars Land, but something tells me it will be better than Empire Of The Penguin.

 

[DarthMileZ]

Disney are always up and down, the only way is up now with Star Wars under their belt...

you have to remember they are struggling right now due to attendance being down in Paris due to the attacks.

that park also needs some serious work.

 

[bjlc57]

Meanwhile at Six Flags, Cedar Point, Busch Gardens, Sea World and other parks around the world attractions open by their next season.



It"s because they won't cut their own bonus's at the top of the chain.

wow.. do us all a FAVOR AND TELL IT LIKE IT IS.. only please SAY IT LOUDER.. because the fools at the top of the Disney food chain can't hear you...

 

[bjlc57]

wow.. do us all a FAVOR AND TELL IT LIKE IT IS.. only please SAY IT LOUDER.. because the fools at the top of the Disney food chain can't hear you...

and for me there is only one response that DISNEY SEEMS TO HEAR.. I am NOT COMING UNTIL the NEW RIDES OPEN.. and if you won't build it I won't come..

 

[jt04]

I'm not sure it can be that fast, but I understand your point and your frustration.

Star Wars Land will take 2 years and 11 months from groundbreaking to grand opening in Anaheim because of the huge amount of regulations, inspections and extra construction steel/fasteners/bracing/design needed to build large structures in earthquake prone Southern California.

The timetable is extended at Disneyland due to Mother Nature and Governor Jerry Brown, in that order. Although Governor Brown would prefer he got top billing.

Cars Land broke ground in Anaheim July, 2009 and grand opened June, 2012; 2 years and 11 months. Star Wars Land broke ground in Anaheim January, 2016 and is strongly rumored to grand open December, 2018; 2 years and 11 months.

That's the timetable and excuse for Anaheim. More importantly, I have no idea why it would take longer to build Star Wars Land in Orlando. They have far fewer regulations and a political environment where Disney's relationship with inspectors and approvals from Reedy Creek and Tallahassee are much cozier than anything Disney has in Anaheim and Sacramento.

There doesn't appear to be a good excuse for the delayed timetable in Orlando. Except for money.

Considering the Florida park is getting reimagined with a budget exceeding DCA 2.0, I'd say money is not a factor. Logistics are. And only logistics.

 

[Siren]

MM+ paying dividends! Absolute stoke of genius to use $1+ billion to put FP+ on rides like Journey into Imagination and Stich's Great Escape. Why build "new" "rides" when you can just funnel people into already existing, lackluster ones, am I right?

And, yeah, maybe we should have focused more on quickly fixing the bus system and monorails, or making sure custodial is adequately staffed, but hey, aren't those matching Magic Bands for your whole family just magical???

Right...?

I know you are being sarcastic. But, the fact is Disney did not crumble and fail like many people had predicted -- if anything, it's the polar opposite. Disney should be applauded for improving the dated infrastructure to support the ever growing crowds. Now Universal is looking into doing the same thing.

With that said, of course, the parks desperately need new rides and some rides like Buzz need updates asap. And, the monorail is a sore spot for me, too. But, it's just not fair to place these park management oversights on Magic Bands and FP+.

Why fix Epcot if it "ain't broke" right? *sigh*

*sigh* While, I am very proud of Disney's success, there is still plenty of work to be done. Right now, DHS and AK are getting new stuff and after the AK stuff is done, I'm sure there will be plans underway for Epcot's Future World!

In the meantime, we have so much to get excited about!

 

[Jon81uk]

But really, no one in American theme parks is attempting to do anything close to what Disney is doing in their parks with Cars Land, Avatar, Star Wars, etc. We're two years and 10 months away from seeing what they cooked up for Star Wars Land, but something tells me it will be better than Empire Of The Penguin.

*cough* Diagon Alley *cough*


But seriously I get your point, a coaster like Mako will always be cheaper and quicker to build than a coaster like Everest. Universal are the only park trying to get close to the Disney style of theming and in parts the Harry Potter stuff does immersion better than Disney. I think recently though SeaWorld/Busch is also thinking why compete with Disney when we can offer something different, hence the hypercoaster.