4th Quarter Profits Soar

[KMovies]

Great quarter

Studio Profit - Operating Income $205 mil, up from $75 mil
TV Unit - Operating Income $298, up from $147 mil
Parks - Operating Income $225 mil, down 4%
Disney - Net Income $415 mil, up from $175 mil

And first Quarter will be the Nemo and POC DVD, Brother Bear and Haunted Mansion releases

Full story



LOS ANGELES (Reuters) - The Walt Disney Co. Thursday reported a quarterly net profit more than double last year's spurred by movie box office and DVD sales at its film studio and advertising at its television networks.


The Burbank, California-based owner of the Disney movie studio, theme parks and ABC and ESPN TV networks, said it earned net income of $415 million, or 20 cents a share, in its fiscal fourth quarter ended Sept. 30, compared with $175 million, or 9 cents a share, in the year-ago period.

Revenues rose to $7 billion from $6.6 billion last year.

Financial analysts had expected Disney to post net income of 16 cents a share on revenues of just under $7 billion, according Reuters Research, a unit of Reuters Group Plc.

"Looking ahead, we are confident in our ability to deliver solid growth for fiscal 2004," Chairman and Chief Executive Michael Eisner said in a statement.

Disney (DIS: Research, Estimates) movie "Pirates of the Caribbean: The Curse of the Black Pearl" proved to be a major hit for the studio, generating just over $303 million at domestic box offices.

It combined with "Finding Nemo," the film in which Disney and Pixar Animation Studios Inc partnered, to make the Disney studio the major success story of this past summer's moviegoing season.

Studio revenues were up 9 percent in the quarter to $2.2 billion and operating income increased to $205 million from $75 million, Disney said in a statement.

The company's television networks saw quarterly revenues increase 8 percent to $2.6 billion on the back of a strong advertising market and higher fees from cable TV affiliates. Operating income was up to $298 million from $147 million last year.

Theme parks -- which include Walt Disney World in Florida and Disneyland in southern California -- reported a 1 percent decrease in revenue and a 4 percent decline in operating income to $225 million, reflecting primarily lower hotel occupancy and attendance, coupled with higher costs at Walt Disney World.

 

[wtg2000]

Linkto the numbers.

 

[WebmasterCricket]

What does "elimination of Euro Disney fees" mean?

JC

 

[wtg2000]

I understand that Disney has suspended royalties from DLP due to their financial troubles. This would mean that Disney would lose that source of revenue for a while.

 

[crusader]

Not only do they stand to lose the royalty income, but there's half a billion in loans at stake.

That's bad news.

I do like how they've allocated the two billion in cash flow - 50/50 split between parks and debt.

But if this is all they have to play with in a banner year, then there will be a tremendous need for a repeat performance revenue wise or we're talking considerable reinvestment slowdown.

The attendance will have to keep rising at the parks to sustain growth and balance the scales better.

 

[TeenaS]

And I see it's still bye-bye for the Stores: "The Company is continuing to pursue, as planned, the sale and disposition of the Disney Store. "

 

[raidermatt]

A more detailed analysis is below from CBS Marketwatch. I won't bother with the link because they never work from that site (at least for me).

Basically, its a mixed bag. I'm going to try to listen to the conference call replay sometime today, but according to the article, attendance was lower at WDW during the quarter (July-Sep). Considering the quarter isn't exactly being compared against banner numbers from the year before, this seems troubling.

EuroDisney is becoming a bigger burden, but we knew that from recent articles.

The Studios did well, as we knew they would. Talk about going from rags to riches...

ABC's lower income is also of concern, since the ad environment is in better shape than a year ago. Remember, Disney set the expectation a year and a half ago when they said this would be the year they could really get some traction on the ABC turnaround.

Still, all in all, not a "bad" report, but again, the improvements are off of a pretty low base, so there is apparently a significant amount of skepticism.

The article follows:





Disney dogged by ABC, park concerns
By Russ Britt, CBS.MarketWatch.com
Last Update: 10:24 AM ET Nov. 21, 2003

LOS ANGELES (CBS.MW) -- Walt Disney Co. doubled its quarterly net income and surpassed Wall Street's forecasts, but it wasn't enough to keep the entertainment giant's stock from easing Friday.

Disney (DIS: news, chart, profile) shares, a component of the Dow Jones Industrial Average, were off 11 cents to $22.57 in early trading as analysts pointed out that the company still has more work to do in turning around its ABC network and getting its theme parks back on their feet.

Analyst Spencer Wang at J.P. Morgan Securities reiterated his "neutral" rating on the stock, saying its price had already reflected the earnings rebound that was reported on Thursday after the closing bell.

Disney reported net income of $415 million, or 20 cents a share, in its fiscal fourth quarter, which ended Sept. 30, compared with earnings of $175 million, or 9 cents a share, for the same period a year ago. Sales were $7 billion, up 5.3 percent from last year's $6.7 billion.

Disney said its earnings included a one-time gain of 3 cents a share from the settlement of tax issues. That leaves the Burbank, Calif.-based company 2 cents ahead of analyst estimates, which called for Disney to earn 15 cents a share for the quarter.

Chairman Michael Eisner underlined the role played by the blockbuster movie "Pirates Of The Caribbean."

"Disney's strong performance in the quarter, driven by the studios and media networks, and the substantial improvement in our overall results during a difficult year provide further evidence that we have established the foundation for future growth," Eisner said in a statement.

Company officials forecast that they would either meet or beat estimates for the 2004 fiscal year, which calls for Disney to earn 84 cents a share.

Analysts generally were pleased with the quarter's results, although some were concerned about trouble spots.

Paul Kim, analyst for Tradition Asiel Securities, said lower income for Disney's ABC networks was one area to watch.

"That was a little disappointing because ABC was supposed to be turning around," he said.

He added that terrorism-induced trouble at Disney's theme parks seems to be bottoming out. For the quarter, theme park sales were off 1 percent and operating income slipped 4 percent.

But Kim is concerned that deals for admission to Walt Disney World in Florida, which are expiring, may have drawn out the demand already leaving risk down the road.

Overall, though, it was a middling quarter, Kim said.

"The bulls kind of heard what they wanted to hear. The bears heard what they wanted to hear," Kim said.

David Mantell at Loop Capital Markets was more upbeat. Mantell said the company's projection of 84 cents earnings per share or higher for next year would give the company 31 percent growth.

"That's quite strong. So overall, we're saying it's a pretty good quarter," Mantell said.

Among its divisions, the biggest income jump came from Disney's studios. "Pirates" and "Freaky Friday" helped Disney post a huge gain, a positive contrast to a write-down in the division recorded last year.

Studios also were helped by DVD releases of "Finding Nemo," which sold 8 million copies its first day and 20 million to date. Also selling well during the quarter was "Bringing Down The House," "Sweet Home Alabama," "Santa Clause 2" and "Chicago."

ABC was brought down by increased programming costs for sports programs. Despite that, the company's media networks posted double the income for the period, rising from $147 million to $298 million, helped by stronger advertising and higher cable affiliate fees.

At the company's theme parks, attendance was lower and costs were higher at Walt Disney World. Further, a loss of royalties and management fees at Euro Disney cut into profits.

Disney's consumer products division was off 4 percent in sales and 3 percent in income. The company still is trying to sell its Disney Stores.