Good News From Disney

MrPromey

MrPromey

Well-Known Member
Original Poster
Originally posted by MrPromey
SHH! You guys are making me look bad! :lookaroun

Seems they moved it. This link should work ... for the moment, anyway. :rolleyes:

cbs.marketwatch.com/news/story.asp?guid={B0C6A702-5F3A-4F93-8EA6-1AFBB2E07E86}&siteid=mktw
Click to expand...

Know what? That one dosn't work either. Guess I should have just posted the article to begin with. Oh well:

Disney income jumps to $222 mln
Results meet estimates as parks, films improve
By Russ Britt, CBS.MarketWatch.com
Last Update: 7:50 PM ET Nov. 7, 2002

BURBANK, Calif. (CBS.MW) -- Walt Disney Co.'s profit quadrupled for the summer quarter, helped by better-than-expected international business at its U.S. theme parks and strong profits in films, the company said Thursday.

Disney said it earned $222 million, or 11 cents a share, in its fiscal fourth quarter ended Sept. 30 compared with $53 million, or 3 cents, a year ago. Revenue rose to $6.7 billion from $5.8 billion.

Disney had lowered its expectations for the quarter based on lower theme-park attendance and fewer bookings at hotels near the parks. The profit of 11 cents per share met the expectations of analysts surveyed by Thomson First Call.

In the end, it wasn't as bad as expected, with theme parks -- usually the company's most profitable division -- doing slightly better than expected in revenue, though margins were not as good, Chief Financial Officer Thomas Staggs said in a call with reporters.

The number of international visitors to Disney's theme parks in Florida and California was down 20 percent, but that was less than expected. In the quarter ended June 30, international business was off 35 percent.

The higher revenue left Disney officials feeling more optimistic about the company's overall picture, he said.

"We feel there's very strong momentum in the right direction," Staggs said. "Overall, we like the way things are going."

Disney's studio operations posted sharp gains. Helping the company along were such movies as "Signs," "Lilo and Stitch" and "Sweet Home Alabama," plus the home-video release of "Monsters Inc." and "The Rookie." But the company increasingly is reaping the benefits of the conversion of home video to the DVD format.

Sales for the movie division grew a whopping 52 percent to $2 billion. Operating income was $149 million. Last year, the segment lost $121 million.

Disney had warned when it last reported earnings in August that it was seeing softness in theme park reservations. But on Thursday the company said that revenue for its parks and resorts segment was down only 1 percent for the quarter, although operating income was off 25 percent.

One of the concerns at the start of the quarter stemmed from lack of advance bookings to its hotels and for groups to its parks. Disney used to get most of its bookings an average of 45 days to 60 days ahead of visitor arrivals. The average now is 15 days to 30 days.

That trend is continuing, prompting Disney officials to be cautious.

Disney President Robert Iger said there were encouraging signs, such as increased phone traffic on its park-reservation lines.

"Even though we see some positive trends, it's too early to expect those trends will continue into the future," Iger said.

Some on Wall Street early this week said the company may have been overly conservative. Some felt Disney (DIS: news, chart, profile) could come in ahead of estimates, while others said Monday that the company's shares might be undervalued.

Disney closed Thursday at $18.26, off 60 cents.

Doug Mitchelson of Deutsche Bank had issued a report earlier in the week, saying he thought Disney shares might be undervalued. But he didn't expect Disney to perform better than it did this quarter.

"It was certainly in line and the guidance for 2003 is in line," Mitchelson said. Disney expects a 20 percent gain in earnings per share next year from the 63 cents it posted for the 2002 fiscal year. Staggs said there should be another 20 percent gain in 2004.

The other trouble spot for Disney, the ABC Television Network, also is benefiting from improved performance, the company said. Disney is first or second in the ratings among young adults -- a key demographic -- on six nights, Staggs said.

As a result, the company won't be in the same "make-goods" situation it was last year, when it had to reimburse numerous advertisers for under performing in the ratings.

It may take a while for Disney to reap additional benefits from its improved ratings performance, however. ABC didn't see a marked improvement in ratings until the quarter almost ended. There also usually is a lag between a ratings improvement and increased ad sales, Staggs said.

The company's media networks segment had 6 percent more revenue, although operating income was off by 60 percent from last year.

Jeff Logsdon of Gerard Klauer Mattison said upheaval in the economy could wreak havoc on the theme parks business, but added Disney seems to be on the right track.

"It's better now to clean up the shop, and it looks like they're improving on the things they need to improve," Logsdon said.
Russ Britt is the Los Angeles Bureau Chief for CBS.MarketWatch.com.
 

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