Resorts Help Earnings for Disney
Essay title: Resorts Help Earnings for Disney
A strong performance from Walt Disney World and other Disney theme parks helped the company reach another profitable quarter last winter.
The company reported Tuesday that while total sales were up just 1 percent to $8.07 billion, profit reached $931 million for the second quarter of the 2007 fiscal year, 27 percent better than profits posted in the same three months in 2006.
With that, Disney offered diluted earnings of 44 cents per share to investors. The offer beat consensus market expectations of around 36 cents, and the 37 cents per share that Disney offered following its second quarter of 2006.
“Weve had another excellent quarter, posting double-digit increases in net income and earnings per share,” said Disney President and Chief Executive Officer Robert Iger. “These results are evidence of our ability to nurture great creativity, our strength in operating a broad range of businesses, and our commitment to financial discipline. . . . They validate our strategic vision.”
Disneys stock closed Thursday at $36.55 per share, up 49 cents.
Analysts were pleased with the report.
“I dont think they had anything to complain about. All the divisions showed nice profits,” said media analyst Harold Vogel of Vogel Capital Management.
Internationally marketed Disney channels, strong syndication of ABC-TV shows, hot Cars toys and Disney-published game sales and hit, relatively inexpensive movies such as Wild Hogs and Bridge to Terabithia helped all the companys operating units post quarterly profits.
Disneys parks and resorts division, which includes theme parks, hotels, the Disney Vacation Club time-share program and the Disney Cruise Line, saw sales grow 9 percent to $2.4 billion in the quarter, which ended March 31.
That success was boosted by increased attendance and higher per- customer spending, which was driven by higher average ticket prices and average daily room rates, according to the report. As a result, the parks and resorts division posted an operating profit of $254 million, up 19 percent from the same period last year.
Those increases partially offset the higher operating costs seen at some parks including Walt Disney World — due to labor cost inflation, new attractions, increased marketing and volume-related costs, the company reported. Most of Disneys other parks also did well.
But Disney Chief Financial Officer Tom Staggs said Hong Kong Disneyland, which opened in the fall of 2005, continues to fall short of expectations and Disney is planning new marketing campaigns.
“Were confident in and committed to this project,” he said. “Were likely to continue to invest