Walt Disney Company stock closed out the day at $49.81, 73 cents off its all time high. Standard & Poor’s reiterated its “Strong Buy” rating on the stock earlier today and raised the target price $3 to $55. The conference call, hosted by Bob Iger (Chairman and Chief Executive Officer), and Jay Rasulo (Senior Executive Vice President and Chief Financial Officer) is coming up at 5pm EST. Listen along here. Relevant updates will be posted as they become available.
- Disney beat on earnings per share, recording a record $1.01 per share, compared to estimates of 93 cents per share. Revenue came in weak at 11.09 billion, compared to estimates of 11.30 billion. The stock is trading down after hours between one and two percent.
- Parks and Resorts revenue came in at 3.44 billion.
- Bob Iger on CNBC: Spending is up “nicely” at Parks and Resorts. The consumer is still flocking to products they find valuable. “No problem” attracting people to Parks. Europe affecting results the most. “Modest declines” in visitation from Europe. Asia is very strong in China and Tokyo. People “willing to pay for a product they believe in.” Disney “invests in this.” Disney has done a “good job increasing pricing.” “Still room to increase prices, but have to keep investing.” Brought up Cars Land as an example. Believes “outlook is favorable.”
From the Conference Call:
- Made significant investments in Parks and Resorts. Completely transofrmed California Adventure, new cruise ships, enhancing and enlarging Fantasyland. California Adventure is the “perfect neighbor to Disneyland.” Attendance and guest satisfaction up. Most days, California Adventure pulls more than 50% of attendance, up from 25%.
- Cruise ship bookings at 94% occupancy
- Fantasyland is largest expansion since Walt Disney World opened. Bulk of investment completed by end of fiscal year. This fiscal year is “peak spending” on Parks and Resorts.
- Avengers third highest grossing movie of all time with nearly 1.5 billion in receipts.
- May 3, 2013 – Iron Man 3 release date
- Thor 2 – November 2013
- Captain America 2 – April 2014
- Avengers sequel in the works. Joss Whedon on contract to develop TV show for ABC and direct Avengers 2.
- Revenue up 9% at Parks and Resorts thanks to Tokyo Disney doing better after last year’s disaster.
- Attendance at domestic parks up 1%. Per capita spending up 8%. Resort occupancy decreased 1.5% to 79%. Domestic inventory up with Aulani and Art of Animation opening. Fourth quarter bookings are up 1%.
- Cars remains the strongest property for consumer products, outpacing Avengers.
- Q3 international attendance at Walt Disney World was identical to last year’s number. A mix shift, Europe and Canada were down, picked up entirely by Brazil and Argentina. Currency swings could affect attendance, but hasn’t been an issue thus far.
Conference Call concluded.
Overall, it sounds like a good quarter for Disney. They’re seeing what seems like a significant return on investment at Disney’s California Adventure as attendance, guest spending, and satisfaction have increased significantly. With attendance gaining in California and declining in Florida, hopefully the suits will decide to invest more money in expanding the Florida theme parks. The “problem” in Florida is that so much of their profits are driven by international visitors from South America that plan to visit one time. They are overwhelmingly more satisfied than European or domestic visitors and also spend more money.
It would not surprise me to start hearing more rumblings about a significant expansion at Disney’s Hollywood Studios, though I don’t expect to see anything related to Cars Land. There’s nothing to indicate Avatar is on hold at Animal Kingdom. Disney has been moot on the subject only because they don’t want to take the focus away from Cars Land and the Fantasyland Expansion.
As of 6pm EST, Walt Disney Company stock is trading down just over 1% to $48.18, just over a dollar off its all time high.