Disney reports lower theme park revenue

[mkt]

from the Orlando Sentinel

LOS ANGELES -- Spurred by movie box office and DVD sales -- as well as its film studio and advertising at its television networks -- Walt Disney Co. reported today a quarterly net profit more than double last year .
However, theme parks, including Walt Disney World and Disneyland, reported a 1 percent decrease in revenue and a 4 percent decline in operating income to $225 million, reflecting primarily lower hotel occupancy and attendance, coupled with higher costs at Walt Disney World.
The entertainment giant said it earned net income of $415 million, or 20 cents a share, in its fiscal fourth quarter ended Sept. 30. That compares with $175 million, or 9 cents a share, in the year-ago period.
"We are confident in our ability to deliver solid growth for fiscal 2004," Chairman and Chief Executive Michael Eisner said in a statement .
Also, revenues rose to $7 billion from $6.6 billion last year.
Disney's "Pirates of the Caribbean: The Curse of the Black Pearl" proved to be a major hit for the studio, generating just over $303 million at domestic box offices.
It combined with "Finding Nemo," the film in which Disney and Pixar Animation Studios Inc partnered, to make the Disney studio the major success story of this past summer's moviegoing season.
Studio revenues were up 9 percent in the quarter to $2.2 billion and operating income increased to $205 million from $75 million, Disney said in a statement.
The company's television networks saw quarterly revenues increase 8 percent to $2.6 billion on the back of a strong advertising market and higher fees from cable TV affiliates. Operating income was up to $298 million from $147 million last year.

 

[Pumbas Nakasak]

Perhaps this will serve as a reminder that patrons have been squeezed enough, and that the penny pinching programmes have not gone down well. Especially at a time when many other things are bidding for a slice of the family income.

 

[TravisMT81]

well if they would cut his pay and bonuses it would be a little bigger hehe.

 

[AndyP]

at least generally things are looking up and 1 percent is not too much.

 

[JLW11Hi]

Remember, this is from the last quarter....

With the new advertising campaign and the new attractions and shows, I would think attendance will pick up this winter.

But I have no idea how those things work....thats just my opinion

 

[TURKEY]

Originally posted by JLW11Hi
Remember, this is from the last quarter....

With the new advertising campaign and the new attractions and shows, I would think attendance will pick up this winter.

But I have no idea how those things work....thats just my opinion

While attendance may pick up over the holidays, the results for the quarter were for July, August, and a lesser extent of September.

While I don't think the 1% is much, it is worth noting that it was still a decrease over some of the summer months.

 

[pepsistar]

:fork: They MUST be kidding!!! I guess they were not at the parks or tried to get a room? I have never seen it soooooo busy. I was there in June, July, Sept. and October. Lets see 120 min wait for TOT?? Same for the Haunted Mansion. Fantasmic closed at 6:30-- so many people you were shoulder to shoulder--watching Wishs Some one ?????? is making money!!!! ?????

The cost is going up , the hours are shorter -- Hummmmmmm! No E- ride nights Sept. Oct. anymore. ( a couple in Sept.) No fast pass' left at 11-12 ?

What Else-- Well, I guess any of you that were there Oct 9Th or in June and July Oct. too, know what I mean--
:lookaroun

 

[TURKEY]

Originally posted by pepsistar
:fork: They MUST be kidding!!! I guess they were not at the parks or tried to get a room? I have never seen it soooooo busy. I was there in June, July, Sept. and October. Lets see 120 min wait for TOT?? Same for the Haunted Mansion. Fantasmic closed at 6:30-- so many people you were shoulder to shoulder--watching Wishs Some one ?????? is making money!!!! ?????

The cost is going up , the hours are shorter -- Hummmmmmm! No E- ride nights Sept. Oct. anymore. ( a couple in Sept.) No fast pass' left at 11-12 ?

What Else-- Well, I guess any of you that were there Oct 9Th or in June and July Oct. too, know what I mean--
:lookaroun

I was there in June. Crowds weren't unbearable. Trust me by looking at some of the numbers (i've got sources), crowds weren't that great.

Wishes didn't begin until after the quarter ended.

 

[disneyisbest]

Disney's reasoning will be. " Ok attendance is down". "What can we do?" Hmm......... . " I know we will raise the prices some more." "That will help.":animwink:

 

[colliera]

Do the addition

". . . 1 percent decrease in revenue and a 4 percent decline in operating income to $225 million.", that's a 5% drop when you count the available funds to run the company.

 

[niteobsrvr]

Originally posted by disneyisbest
Disney's reasoning will be. " Ok attendance is down". "What can we do?" Hmm......... . " I know we will raise the prices some more." "That will help.":animwink:

There are several factors affecting Disney. First and foremost WDW is a mature brand. That means that people who value the Disney brand a vacation destination product are already purchasing it. This means that if Disney wants more people to visit their themepark, they must offer incentive to do so. Typically this means the money lost in one place will be absorbed in other areas at places like a themepark. 7 nights for the price of 4 and children free when using visa are relatively unheard of promotions for a company who for the longest time felt they didn't need to discount their offerings.

It has also been noted by industry experts that the themepark business in America is saturated. The last figure I saw was that visits to the parks in America totaled about 315 million all combined. This is more than 1 visit per person for every single living person in the US. This is why Disney and other amusement companies have taken to building parks overseas in areas like China. THose markets haven't even begun to be tapped out yet.

Finally, for some reason, Americans now work more and take less time off. Thus even the people who in the past might spend a week at Disney are no longer doing so. Instead there are a lot of people who spend 3 and 4 days, arriving on Friday and Staying until Sunday or Monday. There isn't much Disney or any other company can do when people just don't feel they can afford the vacation time.

All of this, however, doesn't mean Disney is excused from the pressures of the stockholders. Quarter after Quarter, year after year, DIsney is still expected to turn in results that reflect growth and higher earnings per share. This becomes difficult when when you apply the factors mentioned above. If you cant increase attendance without discounting, the only thing left to do to increase profits is decrease costs.

Note: I hope people can have this discussion without focusing on Eisner's bonus. In a company the size of Disney with their annual revenue of around 25 billion dollars, his salary and bonus is very close to being immaterial to the accounting department. As an example, if Eisners compensation were 15 million and you divided that up among every cast member at WDW it would only amount to another $272 per cast member, per year, before taxes. Its not an amount worth worrying about.

 

[PeterAlt]

Originally posted by JLW11Hi
Remember, this is from the last quarter....

With the new advertising campaign and the new attractions and shows, I would think attendance will pick up this winter.

But I have no idea how those things work....thats just my opinion

Ah... I was at 3 of the 4 parks this week. MK, EPCOT, and MGM ALL had like no crowds, and ABSOLUTELY NO LINES!!!!!!

Hopefully it's just a seasonal thing.