TW1
11-12-2007, 04:51 PM
Interesting article in the Orlando Sentinel this morning. I chose to bold some type relating to DVC and the parks. I like Iger's take on California Adventure. Enjoy!
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Disney rolls up 2nd year with jump in profit
Theme-park figures are especially impressive, an industry analyst says.
Scott Powers | Sentinel Staff Writer
November 9, 2007
Editor's Note: An earlier version of this story incorrectly stated the net profit for fiscal 2007, the percent growth over fiscal 2006 and the net profit for the fourth quarter of fiscal 2007. The net profit for fiscal 2007 was $4.69 billion, the percent growth over fiscal 2006 was 39 percent and the net profit for the fourth quarter of fiscal 2007 was $877 million.
Bolstered by big profits from its movie studios and TV networks, and solid profits from its theme parks and resorts, the Walt Disney Co. completed a second straight record year with yet another strong quarter.
The company posted a 5 percent increase in sales and a 39 percent jump in net profit for its 2007 fiscal year, which ended Sept. 29, according to financial reports filed Thursday with the U.S. Securities and Exchange Commission.
"We've had another year of outstanding financial results," said Robert A. Iger, Disney's president and chief executive officer. Disney had $35.5 billion in sales for the year, up from $33.7 billion in fiscal 2006. Net profit was $4.69 billion, up from $3.37 billion a year earlier.
Rick Munarriz, a senior analyst at The Motley Fool who specializes in entertainment stocks, said the movie business can be volatile, so he's particularly impressed that Disney has been able to sustain growth within its other divisions: media networks, consumer products, and parks and resorts. The parks' figures are especially impressive, he said, considering the losses reported recently by some other theme-park companies.
"Disney is hitting it out yet again," Munarriz said. "Obviously you can't compare a regional amusement park to a national monster like Disney, but it's marching to its own Mickey Mouse drummer at this point, and it's quite the beat."
The company's fourth-quarter revenue totaled $8.9 billion, compared with $8.7 billion during the same period last year. Fourth-quarter net profit amounted to $877 million, which allowed Disney to offer diluted earnings of 44 cents a share, up from 36 cents a year ago. A one-time tax adjustment accounted for 2 cents' worth of that increase, but even at 42 cents a share, the company's performance beat the 41-cent prediction of stock analysts surveyed by Thomson/First Call.
The quarter was at least the eighth in a row in which Disney recorded year-over-year increases in revenue and profit.
Disney's Parks and Resorts, Consumer Products and Broadcast Networks divisions all posted higher sales for the quarter and identical, 7 percent sales increases for the fiscal year. They each also showed reported gains in operating profit.
Fourth-quarter sales were down for Disney's Studio Entertainment segment. The division's sales for the year also fell, just 1 percent, but it still managed a 65 percent increase in operating profit.
Iger said Disney's future appears bright because of its strategy of developing strong new franchises, such as High School Musical and Hannah Montana, that it then sells through TV shows, music, toys, video games, and theme-park attractions in markets around the world.
"These results come directly from our emphasis on the creation of high-quality content across all of our businesses, backed by a clear strategy of maximizing the value of that content across platforms and markets," Iger said.
"Strong, recognizable and relevant brands that help us cut through an increasingly cluttered media landscape, giving us entree to new platforms and new geographic markets, and giving us new consumers."
The Parks and Resorts division's revenue for the year totaled $10.6 billion, while its operating profit rose 11 percent to $1.7 billion. For the quarter, revenue increased 10 percent to $2.8 billion and operating profit increased 9 percent to $430 million.
Walt Disney World, Disneyland Paris and the Disney Vacation Club provided much of the strength in the Parks and Resorts segment, according to Iger and to Tom Staggs, the company's senior executive vice president and chief financial officer.
Although they did not detail Disney World's attendance, Staggs said it set a record this fiscal year and more than offset a slight decline at Disneyland Resort in Southern California, giving the company an overall 5 percent increase in domestic admissions. Disney World's average hotel-occupancy rate rose 7 percentage points to 90 percent, while spending by the average guest grew 2 percent, in part because of an increase in ticket prices and room rates.
Disney World, however, was not among the direct beneficiaries of the big-ticket capital investments outlined by Iger for Parks and Resorts. The company's three key decisions of 2007, as he called them, were: continued investment in Disney Vacation Club, with the announcement of a new Hawaiian resort; continued investment in Disney Cruise Line, with the purchase of two new ships; and a $1 billion makeover of Disneyland Resort's California Adventure theme park.
"Let's face it: We had a problem with California Adventure. It was not as successful, and the returns on that investment were not as strong as we would like," Iger said. "As we looked at the entire Disneyland Resort, . . . we concluded that the only way to grow that business would be to fix and expand California Adventure."
Scott Powers can be reached at spowers@orlandosentinel.com or 407-520-5441.
Copyright © 2007, Orlando Sentinel
- - - -
Disney rolls up 2nd year with jump in profit
Theme-park figures are especially impressive, an industry analyst says.
Scott Powers | Sentinel Staff Writer
November 9, 2007
Editor's Note: An earlier version of this story incorrectly stated the net profit for fiscal 2007, the percent growth over fiscal 2006 and the net profit for the fourth quarter of fiscal 2007. The net profit for fiscal 2007 was $4.69 billion, the percent growth over fiscal 2006 was 39 percent and the net profit for the fourth quarter of fiscal 2007 was $877 million.
Bolstered by big profits from its movie studios and TV networks, and solid profits from its theme parks and resorts, the Walt Disney Co. completed a second straight record year with yet another strong quarter.
The company posted a 5 percent increase in sales and a 39 percent jump in net profit for its 2007 fiscal year, which ended Sept. 29, according to financial reports filed Thursday with the U.S. Securities and Exchange Commission.
"We've had another year of outstanding financial results," said Robert A. Iger, Disney's president and chief executive officer. Disney had $35.5 billion in sales for the year, up from $33.7 billion in fiscal 2006. Net profit was $4.69 billion, up from $3.37 billion a year earlier.
Rick Munarriz, a senior analyst at The Motley Fool who specializes in entertainment stocks, said the movie business can be volatile, so he's particularly impressed that Disney has been able to sustain growth within its other divisions: media networks, consumer products, and parks and resorts. The parks' figures are especially impressive, he said, considering the losses reported recently by some other theme-park companies.
"Disney is hitting it out yet again," Munarriz said. "Obviously you can't compare a regional amusement park to a national monster like Disney, but it's marching to its own Mickey Mouse drummer at this point, and it's quite the beat."
The company's fourth-quarter revenue totaled $8.9 billion, compared with $8.7 billion during the same period last year. Fourth-quarter net profit amounted to $877 million, which allowed Disney to offer diluted earnings of 44 cents a share, up from 36 cents a year ago. A one-time tax adjustment accounted for 2 cents' worth of that increase, but even at 42 cents a share, the company's performance beat the 41-cent prediction of stock analysts surveyed by Thomson/First Call.
The quarter was at least the eighth in a row in which Disney recorded year-over-year increases in revenue and profit.
Disney's Parks and Resorts, Consumer Products and Broadcast Networks divisions all posted higher sales for the quarter and identical, 7 percent sales increases for the fiscal year. They each also showed reported gains in operating profit.
Fourth-quarter sales were down for Disney's Studio Entertainment segment. The division's sales for the year also fell, just 1 percent, but it still managed a 65 percent increase in operating profit.
Iger said Disney's future appears bright because of its strategy of developing strong new franchises, such as High School Musical and Hannah Montana, that it then sells through TV shows, music, toys, video games, and theme-park attractions in markets around the world.
"These results come directly from our emphasis on the creation of high-quality content across all of our businesses, backed by a clear strategy of maximizing the value of that content across platforms and markets," Iger said.
"Strong, recognizable and relevant brands that help us cut through an increasingly cluttered media landscape, giving us entree to new platforms and new geographic markets, and giving us new consumers."
The Parks and Resorts division's revenue for the year totaled $10.6 billion, while its operating profit rose 11 percent to $1.7 billion. For the quarter, revenue increased 10 percent to $2.8 billion and operating profit increased 9 percent to $430 million.
Walt Disney World, Disneyland Paris and the Disney Vacation Club provided much of the strength in the Parks and Resorts segment, according to Iger and to Tom Staggs, the company's senior executive vice president and chief financial officer.
Although they did not detail Disney World's attendance, Staggs said it set a record this fiscal year and more than offset a slight decline at Disneyland Resort in Southern California, giving the company an overall 5 percent increase in domestic admissions. Disney World's average hotel-occupancy rate rose 7 percentage points to 90 percent, while spending by the average guest grew 2 percent, in part because of an increase in ticket prices and room rates.
Disney World, however, was not among the direct beneficiaries of the big-ticket capital investments outlined by Iger for Parks and Resorts. The company's three key decisions of 2007, as he called them, were: continued investment in Disney Vacation Club, with the announcement of a new Hawaiian resort; continued investment in Disney Cruise Line, with the purchase of two new ships; and a $1 billion makeover of Disneyland Resort's California Adventure theme park.
"Let's face it: We had a problem with California Adventure. It was not as successful, and the returns on that investment were not as strong as we would like," Iger said. "As we looked at the entire Disneyland Resort, . . . we concluded that the only way to grow that business would be to fix and expand California Adventure."
Scott Powers can be reached at spowers@orlandosentinel.com or 407-520-5441.
Copyright © 2007, Orlando Sentinel