Earnings Call

[raidermatt]

The 3rd quarter (for Disney) earnings call was this afternoon, and Disney met analysts projections for earnings per share, coming in at 18 cents per share. However, they downgraded expectations for the 4th quarter. (and the stock has subsequently dropped 8% in after hours trading...)

Here's a link to the press release (click on 3rd quarter 2002):

Press Release

On the call, Disney said its domestic park attendance was down 6% from 3Q '01. This is the same drop as in the 2Q. However, they said that 2Q was actually a little worse than that, while 3Q was a little better due to Spring Break being in different quarters (3q in 2001, 2q in 2002).

Occupancy at WDW was "flat", while it was "off slightly" at DLR. Tokyo Disneyland Resort was deemed a "smashing success", even though they had seen some recent slowness due to the World Cup. (if they say so...)

The new park in Paris experienced "lower than expected" attendance, though they said guest surveys were extremely positive.

Reservations for the 4Q at both domestic sites (I believe) are down about 10% from where they were this time last year. They did say that the booking window has dropped to 14-30 days.

There were several interesting questions, one of which I thought was paticularly interesting. An analyst referenced a Municipality of Orange County (CA) report that said domestic tourism into Orange County was up 4% for the year. He said this was out of whack with what Disney was saying about the results for DLR. Here was the response from Iger or Staggs (I removed the "uhs", "ums", etc):

“I think what you’re looking at is a trailing statistic and in fact domestic tourism was up for our second quarter at the theme parks, so I don’t think its necessarily in conflict with what you’re seeing. With a little bit, as we discussed, we’re seeing a little bit of softness in that today. But given that you’re looking at a trailing statistic, it does not seem out of whack to me. By the way, the same can be said of the WDW statistics.”

What? The only thing I can think of is they meant that the statistic only went through 1Q of this year (Disney's 2Q). Spring Break was in Disney's 2Q, and I believed they reported that DLR attendance was up for 2Q, though they qualified it with the Spring Break comment at the time.

Does anybody know anything about this Orange County (CA) report? What time period did it cover? I'll see what I can find, but if anybody can post a link, that would be great...

 

[manning]

Disney is already warning 4th qtr earnings to be somewhat lower than last years 13 cents a share. Analysts expected 16 cents a share.

Also indications that the stock isn't going to do good tomorrow. 7:59 PM price at $15.40.

 

[raidermatt]

Not sure if this means anything, but Eisner's only participation was to read a statement via conference call from New York. I've called into the last couple of calls, but honestly can't remember the extent of his participation in the past, or from where he participated.

Given the poor reported outlook for the 4Q, and its impact on the stock, might there be an accelerated timeframe for whatever changes maybe coming?

 

[Buzz2001]

Disney Falls on Forecast for Lower 4th-Quarter Profit (Update2)
By Kim Chipman

Burbank, California, Aug. 2 (Bloomberg) -- Walt Disney Co. shares dropped as much as 11 percent after the second-biggest U.S. media company said fourth-quarter profit may decline as fewer tourists visit its theme parks in Florida and California.

The number of international tourists visiting Disney's parks is down 30 percent from a year ago, President Robert Iger said in an interview on Bloomberg Television yesterday.

The parks are Disney's biggest profit generator and analysts expected them to show an improvement this quarter from last year, when the Sept. 11 terrorist attacks on New York and Washington crimped tourism. A fear of traveling around the first anniversary of the attacks is keeping people away from Disney's attractions in the three months ending Sept. 30, investors say.

``I wouldn't want to be flying around in early September myself,'' said Andrew Rittenberry, an analyst at Gabelli Asset Management, which owns Disney shares.

Disney shares slid $1.79 to $15.04 at 11:24 a.m. in New York Stock Exchange composite trading after falling to $14.90. The stock had plunged 36 percent in the past year.

Hotel bookings at the parks, which include Walt Disney World in Florida and Disneyland in Southern California, are down about 10 percent from last year, the Burbank, California-based company said yesterday, when it reported fiscal third-quarter results.

``The weak economy and fears of further terrorism continue to pressure attendance,'' Merrill Lynch analyst Jessica Reif Cohen wrote in a report today. She has a long-term ``strong buy'' rating on Disney shares.

The analyst reduced her earnings estimates for Disney's fiscal fourth quarter and for the fiscal year that beings on Oct. 1.

Third Quarter

Disney yesterday posted a 7.1 percent drop in fiscal third- quarter profit because of the theme parks and disappointing results at the ABC television network and the company's movie studio.

Earnings dropped to $364 million, or 18 cents, in the period ended June 30, from $392 million, or 19 cents, a year earlier. Sales slipped 2.8 percent to $5.8 billion.

Third-quarter sales at the parks slipped 5 percent to $1.85 billion, while operating profit fell 17 percent to $467 million.

Revenue at Disney's media networks division, which includes ABC and the ESPN cable-TV channel, fell 10 percent to $2.13 billion. Operating profit fell 40 percent to $288 million.

Audience ratings at ABC, the third-ranked U.S. TV network, have fallen more than 20 percent in the TV season that started last September. Lower-than-expected ratings forced ABC to give away millions of dollars in ad time this year, the network has said.

In the year-ago fourth quarter, Disney had net income of $53 million, or 3 cents a share, on sales of $5.81 billion.

 

[PamOKW]

It was down to $14.90 this morning and is up to $15.03 at 3:00 p.m. Wonder where it will close?