Disney Releases Fourth Quarter Earnings Statement
The company announced yesterday that fourth quarter net income was down seven percent, but is quick to offer many explanations and adjustments that would make that figure smaller.
And while overall parks and resorts revenue fell by one percent, Walt Disney Studios reported that revenue in that business segment was up 6 percent, owing to the great success of many 2010 film releases, including ”Toy Story 3,” “Alice in Wonderland,” and Marvel Comic’s“Iron Man 2.” In fact, for the year, profits for the company leapt a full 20%, in large part due to healthy movie returns, as well as continuing advertising success and affiliate-fee gains within ESPN.
The company had been cautioning for sometime that, owing to a scale back of discounts and incentives, it expected to see profits in the theme park and resort segments decline somewhat in 2010, and that appears to be in line with what has occurred. Resort occupancy continued to fall during the fourth quarter by one percent, when compared to the same period last year. But critics also point to the success of other theme parks in the Orlando market – especially Universal’s new Wizarding World of Harry Potter – as a factor in the decline. Universal, by contrast, saw a 36 percent increase in attendance during the same period, according to the company.
Disney also blames rising labor costs across its U.S. theme parks and resorts, and soft sales in its time share segment, Disney Vacation Club, and shifting of ESPN revenue to the third quarter for the fourth quarter losses.
Still, Disney President and CEO Bob Iger believes that there are a lot of positive signs and trends that point to growth in the new year. In a statement, he called 2010 “a good one financially and strategically for our company.”
Though attendance and occupancy at the Florida resort was down, Disneyland Resort saw an increase of twenty percent in attendance at its California Adventure theme park, which the company attributes to the debut of its new nighttime show, World of Color. As previously mentioned, the Studios segment also saw an increase. And even though resorts and parks were down for the quarter, per capita guest spending in the parks and per-room hotel revenue were up modestly. And even more promising perhaps: hotel occupancy rates are already up five percent in the new fiscal year first quarter over the same period last year.
Adjusted earnings came to 45 cents per share, down from 46 cents a year ago and a cent below forescasted earnings.
Overall, it would seem that Disney’s financial picture reflects back where most of the world is at present: recovering, but slowly.