Walt Disney Company’s fourth quarter earnings were leaked early today. The news was not good and the stock dropped about 3% to $35.93 at the end of regular trading. The stock price is currently up to $36.59 as of 5pm EST, meaning traders are hearing positive comments on the earnings conference call. Fourth-quarter profit fell 7% on charges and decreased earnings at its cable channels and theme parks. Disney said it earned $835 million, or 43 cents a share, compared to a profit of $895 million, or 47 cents, in the year-ago period. Total revenue fell 1 percent to $9.7 billion from $9.9 billion.
The fourth quarter report is available from Disney here.
Conference Call Highlights:
- Disney blames revenue miss on the fact that fiscal fourth quarter 2010 was one week shorter than fiscal fourth quarter in 2009.
- Theme Park margins impacted by lower revenue from Disney Vacation Club and fewer unit sales
- Pension and post-retirement medical costs exceeded expectations
- Domestic theme park attendance down 6%. If you consider the fact that fourth quarter 2010 was one week shorter than 2009, theme park attendance was up 1% in 2010 compared to 2009.
- Per-capita spending at domestic theme parks up 6%, meaning people who visit Disney parks are spending more
- Room occupancy at Disney-owned resorts at Disney World down 1% to 83%.
- Higher attendance at Disneyland Paris (up 3%) and Hong Kong (up 26%)
- Question from Bank of America analyst asked about the Disney theme park in Shanghai: It will take about five years to build. Disney is saving more information for a formal announcement.
- Asked about future stock dividends: Dividends coming “when appropriate”
- Barclays asked about return on investment in the theme parks and cruise line: Stellar returns on cruise line investment. Disney Dream launching in January, bookings “extremely strong.” California Adventure not returning value and has “negative brand impact.” Capital going in to help grow Disneyland resort. Results “great” with World of Color. No “significant” spending planned at domestic Disney theme parks after 2011.
- Strategy to “normalize” pricing at Disney-owned resorts. Discounts and promotions will continue during slower times, but fewer discounted dates going forward.
- Hong Kong Disneyland attendance up due to last year’s H1N1 virus scare.
Conference call concluded.
That’s what they said. Conference calls are usually pretty “cryptic” and they actually refused to answer several questions. Time will tell whether we actually see fewer discounts. Considering domestic theme park attendance is basically flat and occupancy numbers are down, it seems unlikely that Disney could successfully raise prices and discount fewer dates.