Orlando Sentinel - A 7 percent jump in attendance at Walt Disney World, strong performances by the movie Cars and several cable TV shows, and consumer product sales gave the Walt Disney Co. a big boost during the third quarter of its 2006 fiscal year. The company Wednesday announced a 12 percent increase in revenue and a 39 percent increase in profit during the third quarter, which ended July 1, compared with the third quarter of 2005. The company reported $8.6 billion in revenue for the quarter, up from $7.7 billion in 2005, and profit of $1.1 billion, up from $811 million in 2005. That allowed Disney to post diluted earnings of 53 cents per share, well above the 40 cents to 45 cents many analysts had projected. Many analysts were pleased Wednesday morning. David Miller of the Sanders Morris Harris Group called them "stellar results." But while Disney's stock price was up much of the day, it fell in the afternoon, closing at $28.83, down 15 cents from the Tuesday close. Bob Iger, Disney president and chief executive officer, said the third quarter's strong showing was driven by the company's ability to leverage the success of Cars, the DVD sales of Chronicles of Narnia: The Lion, The Witch and The Wardrobe, and other hits such as the Disney Channel's TV show High School Musical over all segments of business, including the theme parks and consumer products. The mega-blockbuster movie Pirates of the Caribbean: Dead Man's Chest, though not released until after the quarter ended, also helped, through pre-release Internet and merchandise sales. While the hit movies and TV shows poured money into the company, the theme parks did well too, though part of that success was attributed to a calendar issue. The busy Easter week vacation period occurred in the third quarter this year, but was in the second quarter of 2005. Theme-park attendance was up 7 percent for Walt Disney World, per-capita guest spending was up 1 percent, and the resort's hotel-room occupancy reached 92 percent, compared with 88 percent last year. Disneyland, which had a banner 2005 thanks largely to the 50th anniversary celebration, saw more modest growth for the quarter: 1 percent in attendance and flat in hotel-room occupancy, though per-capita spending rose 9 percent. Disney also reported that Walt Disney World's success was bolstered by Expedition Everest, the new roller coaster at Disney's Animal Kingdom, the Magic Your Way ticket package program and Disney's Magical Express transportation service between Orlando International Airport and Disney World hotels. Overall, Disney's theme-park segment saw an 11 percent increase in revenue to $2.7 billion for the quarter, and a 26 percent increase in operating profit, to $549 million. Disney's movie studios division -- which merged with Pixar Animation during the quarter -- saw the biggest jump in revenue, up 17 percent. Disney's TV networks' revenue grew by 10 percent. Even the consumer products division, which has been stagnant in recent financial reports, posted a 6 percent growth. "I'm pleased to report that the strength of our earnings reflects solid performance across all of our segments," Iger said during an earnings call with investors. "We've talked about continuing efforts to invest in the quality of our brands and content to best position Disney to deliver growth and shareholder value over the long-term. Our current success is a direct outgrowth of that focus." The third-quarter numbers add to what already was a solid year for Disney. Chief Financial Officer Thomas Staggs told the investors the company was well on its way to a full fiscal year of double-digit growth -- its fourth straight. There are a few dark clouds, however. A couple of analysts expressed worry during the conference call that gas prices and consumer confidence could cut into theme-park attendance in coming months. Last year's fourth-quarter attendance at theme parks was at record levels, and Staggs said Disney would be happy to match it. Hong Kong Disneyland continues to struggle. Disney's experiments with providing ESPN material over cell phones has not met expectations. William Drewry of Credit Suisse called the earnings report "fantastic," but cautioned that uncertain consumer confidence means, "All the market or investor worry is focused as much as anything on the theme parks." On the other hand, the record-breaking box-office performance of the Pirates movie will show up in the fourth quarter. That will be followed by DVD releases of both Cars and Pirates. And Disney will start its "Year of a Million Dreams" campaign in October. Iger also hinted at the development of a theme-park ride based on Cars. "Down the road you shouldn't be surprised to see a Cars-based attraction at one or more of our parks," Iger said.
There's also an interesting article in the Sentinel about the WDW/Universal/Marineland battle for tourists. ; It's an interesting take on the recent price increase. Hmmm... how can we share in that profit?????
