Get ready for price increases

[Travisma 1,317]

I'll admit right off, that I'm not the smartest person when it comes to high finance and the stock market, but looking at the real world, you've got to think that something isn't quite right.

How does someone predict 6 months or a year out, how well a company is going to be doing, then the stocks tumble because they predicted the earning should've been 4 cents higher per share? 

These are the same people that predict how busy a company will be based on last years trends, and that's how they schedule staffing...

Disney shares plunge as earnings rise but miss estimates

Shares of The Walt Disney Co. (DIS) tumbled 5% Tuesday after the media giant reported  second-quarter earnings and revenue that fell short of Wall Street estimates.

The company said earnings rose 2% as Star Wars and Disney resorts' performance helped offset flat revenue at its television businesses. But earnings per share, after adjusting for some items, were $1.36, short of the $1.40 estimated by analysts polled by S&P Global Market Intelligence. Net income for the period that ended April 2 totaled $2.14 billion vs. $2.1 billion a year ago.

Revenue rose 4% to $12.97 billion. Analysts had estimated $13.2 billion.

The results came out after the market closed and shares plunged 5.4% to $100.90 in after-hours trading. The stock rose 1.2% in regular trading to close at $106.60.

Analysts noted a number of factors that led to Disney’s failure to meet their expectations. Barclays said Disney appears to be having a tougher time in its media network segment, which includes sports giant ESPN. It also underperformed in consumer products.

“Despite the continued lack of visibility on Disney’s CEO succession plans and the underperformance over the course of this year, Disney continues to be the most expensive media stock” wrote analysts Kannan Venkateshwar, Shelley Yang and Divyaunsh Divatia in a note to investors.

Revenue for the media networks unit, Disney's largest business division that runs ABC, ESPN and other TV networks, was flat at $5.8 billion. The unit's cable networks business saw its revenue decline 2% to $4 billion but operating income rise 12% due to higher affiliate fees ESPN collected from pay-TV companies.

 

For the full story go to   http://www.usatoday.com/story/money/2016/05/10/disney-q2-earnings-rise-star-wars-miss-estimates/84197582/

 

 

 

 

[fladogfan aka Gretchen 259]

 

Hugh headline in today's Orlando Sentinel. 

Disney World's attendance slips

Guests are spending more on tickets, hotels

By Sandra Pedicini

Staff Writer

Fewer people visited Walt Disney World from January to March compared with the year before as a new pricing strategy went into effect.

The Walt Disney Co. reported the attendance figures Tuesday in an overall second-quarter earnings report. Earnings per share missed analysts' expectations for the first time in five years.

Overall, Disney's year-over-year profit rose 2 percent to $2.14 billion. Revenue for Disney's second quarter was $13 billion and adjusted earnings per share were $1.36.

Higher per-guest spending — pricier tickets, more money shelled out on merchandise and higher hotel room rates — accounted for a 4 percent revenue gain in Disney's parks-and-resorts division.

Chief Executive Officer Bob Iger told analysts the company was focusing on raising revenue even at the expense of attendance increases. “We like the steps we've taken in terms of pricing,” he said. “We've taken a number of steps … to essentially grow revenue, in some cases actually at the expense of some attendance.”

Iger said the company is “changing our pricing approach, sometimes in part to moderate attendance so the park experience is a little bit better, but all designed with the effect of essentially raising revenue.”

In February, Disney put into effect variable pricing that spikes ticket costs at the busiest times of year. Last year Disney changed its annual-pass system in an attempt to shift demand and implemented big price increases.

Still, Disney from mid-March to April 1 lifted blackout dates on special Florida-resident three- and four-day tickets. Some analysts saw that as a sign Disney was trying to boost attendance that had fallen short of projections.

“Price increases could be a contributing factor to the attendance decline, but that is not necessarily a negative for Disney so long as the hotels remain substantially full,” Pacific Asset Management analyst Bob Boyd said in an email.

Disney described the attendance decrease in Orlando as “modest.” Overall its theme parks generated $3.9 billion in revenue. Operating income for the theme parks in the second quarter increased 10 percent to $624 million.

Per-guest spending at the domestic theme parks jumped 8 percent. Per-room spending at hotels increased 5 percent. Hotel occupancy declined 1 percentage point to 88 percent.

Domestic resort reservations are pacing up 5 percent so far this quarter, while booked rates are down 2 percent, Disney said.

Overall, other theme park companies with an Orlando presence have also seen attendance slowdowns. Last week SeaWorld Entertainment reported its first-quarter Florida visitation decreased, largely as a result of a drop off in Brazilian traffic, and Universal Orlando's corporate owner in April reported “stable” first-quarter theme-park attendance.

Some analysts said Tuesday that they did not find Disney's attendance decrease alarming, and Wall Street's expectations of $1.39 per share were relatively high.

Disney's stock was down about 5 percent in after-hours trading Tuesday afternoon.

Also on Tuesday, the company announced it will shutter Disney Infinity, a video-game unit.

Disney's media segment, which makes up almost half of sales, reported slightly lower year-over-year sales for the first time since 2010. That was primarily because a shift in timing reduced the number of college-football games in the quarter. “Nonetheless, the number was disappointing in light of other media peers reporting much stronger advertising growth,” according to a research note from the Edward Jones firm.

In Disney's second quarter, the company abruptly announced the departure of Chief Executive Officer Tom Staggs, whose last day in the position was May 6. Staggs had been seen as the logical successor to Iger, who will retire in two years.

In response to an analyst's question, Iger said there would be plenty of time to identify a successor and that he has no plans to extend his contract.

Disney executives focused on the positives, including strong studio performance. Boosted by “Zootopia” and “Star Wars: The Force Awakens,” the studio division reported a 22 percent increase in revenues and a 27 percent gain in operating income. “Studio results were exceptional and Disney is continuing an amazing hot streak there,” Boyd said in an email.

- See more at: http://digitaledition.orlandosentinel.com/tribune/article_popover.aspx?guid=a1763f8e-ce93-4ebf-b303-ac0b2493ae92&t=1462974071036#sthash.rBbwnv39.dpuf

[Seals 111]

"It also underperformed in consumer products."

I guess, people finally got tired of buying Frozen merchandise. 

 

[Travisma 1,317]

19 minutes ago, Seals said:

"It also underperformed in consumer products."

I guess, people finally got tired of buying Frozen merchandise. 

 

And yesterday, they announced that they are dropping the Disney Infinity  video game components.  That includes Disney figures, Marvel, and Star Wars.

[Avatab.... Steve 124]

9 hours ago, fladogfan aka Gretchen said:

 

 

Chief Executive Officer Bob Iger told analysts the company was focusing on raising revenue even at the expense of attendance increases. “We like the steps we've taken in terms of pricing,” he said. “We've taken a number of steps … to essentially grow revenue, in some cases actually at the expense of some attendance.”

Iger said the company is “changing our pricing approach, sometimes in part to moderate attendance so the park experience is a little bit better, but all designed with the effect of essentially raising revenue.”

 

 

This is right in line with our conversations here about Disney "managing demand" instead of expanding parks or resorts (or campsites)

And it confirms that they are more interested in short term revenue than long term expansion, at least for right now.

The fact that it has worked for them means that Travisma is correct, expect more of this.

 

 

[Santa ... Shannon 160]

Disney and Apple are down? Time to sell some indexes and BUY!

[Travisma 1,317]

Though Disney wasn't mentioned specifically since it was in a Tampa newspaper, the article mentioned Busch Gardens and Seaworld seeing a large decrease in Brazilian tourists due to economic woes in their country.

So that may be some of the drop in Disney's attendance.

[keith_h 420]

9 hours ago, Travisma said:

Though Disney wasn't mentioned specifically since it was in a Tampa newspaper, the article mentioned Busch Gardens and Seaworld seeing a large decrease in Brazilian tourists due to economic woes in their country.

So that may be some of the drop in Disney's attendance.

No great loss in my mind.

[parrothead7368 aka Norm 101]

Their biggest loss is once again from ESPN, they need to fix that and the profit will be back. They need to stop trying to compensate their TV loss through the parks, it will never work and they'll lose money on both by driving people away.

[BradyBzLyn...Mo 2,023]

 

On 5/11/2016 at 9:45 AM, fladogfan aka Gretchen said:

 

Chief Executive Officer Bob Iger told analysts the company was focusing on raising revenue even at the expense of attendance increases. “We like the steps we've taken in terms of pricing,” he said. “We've taken a number of steps … to essentially grow revenue, in some cases actually at the expense of some attendance.”

Iger said the company is “changing our pricing approach, sometimes in part to moderate attendance so the park experience is a little bit better, but all designed with the effect of essentially raising revenue.”

 

14 hours ago, Avatab.... Steve said:

 

This is right in line with our conversations here about Disney "managing demand" instead of expanding parks or resorts (or campsites)

And it confirms that they are more interested in short term revenue than long term expansion, at least for right now.

Although based on Iger's comments, they may have overshot a bit and not realized exactly how much they "moderated" attendance down.  That said, I don't expect we'll see any across the board price decreases - that horse is out of the barn.  What I would expect is more short-term promotions to try and goose attendance as they adjust their projections based on the new pricing model.

[BradyBzLyn...Mo 2,023]

Oh and also, while their resort occupancy in the U.S. is down to 88%, it's still above the industry standard for central FL so... yeah, don't expect more discounts for the Fort. 

[lightbikes 73]

6 hours ago, keith_h said:

No great loss in my mind.

Nor in mine!

 

[Travisma 1,317]

1 hour ago, lightbikes said:

Nor in mine!

 

You mean you won't miss pushy, dressed alike people, following a loud person waving a flag and smacking people with it.

[mouseketab.....Carol 1,261]

I'm lost here. More profit, lower crowds. Isn't that a win/win for everyone?

[keith_h 420]

13 minutes ago, mouseketab.....Carol said:

I'm lost here. More profit, lower crowds. Isn't that a win/win for everyone?

I guess it would depend upon if you are one of the folks who could afford the higher ticket prices or one of the folks who couldn't go due to the price increase. Iger has a good point that it will take a while for everything to settle out and this is a long term thing not quarterly. I'm sure there will be some tuning as Disney learns how to make all of the tiers and and demand pricing work. 

[mouseketab.....Carol 1,261]

28 minutes ago, keith_h said:

I guess it would depend upon if you are one of the folks who could afford the higher ticket prices or one of the folks who couldn't go due to the price increase. Iger has a good point that it will take a while for everything to settle out and this is a long term thing not quarterly. I'm sure there will be some tuning as Disney learns how to make all of the tiers and and demand pricing work. 

Oh, I agree, we pop down there a lot less often than we used to, and are a lot more selective about when we purchase Annual Passes. (We stretch them out over 2 seasons, and try to have an off year).

But if the quality of the visits we do make are higher due to lower crowds, then I'm all for it.

[keith_h 420]

1 hour ago, mouseketab.....Carol said:

Oh, I agree, we pop down there a lot less often than we used to, and are a lot more selective about when we purchase Annual Passes. (We stretch them out over 2 seasons, and try to have an off year).

But if the quality of the visits we do make are higher due to lower crowds, then I'm all for it.

No disagreement about a preference for lower crowds. Some of the loss could also just be folks adjusting to the price increases. Once they figure how they affect them I wouldn't be surprised to see attendance go up.

[lightbikes 73]

5 hours ago, Travisma said:

You mean you won't miss pushy, dressed alike people, following a loud person waving a flag and smacking people with it.

Nope - won't miss them at all!!!! 

[Starbuc71 162]

Hey all

its been a while since I posted anything. To be honest, it's been 6 months since we gave up or AP's and we really don't miss them. Actually the kids don't miss it either.  The more I read on here from time to time about price tiering, price increases, price gouging, talking advantage of the working mans wallet and on top of all that, taking years to complete new attractions, I'm glad we don't go anymore. I guess it's like all big business, it's all about making money.....I mean big money with a cut in customer service.   We still camp at the fort from time to time mostly because we all know it's one of the best campgrounds in the US. 

I don't understand why every other theme park comes out with just about one new attraction a year, or maybe every two.  Disney takes years and now maybe decades.  I'm not a hater, I may sound like it, but I'm glad the Brazilian tour groups are down. I'm glad attendance is down and I'm glad if FL annual passes are down.  Maybe this will wake Iger up and realize Disney is for everybody and not just the elite rich.  Give the people new rides, cheaper prices and what they want to a point. PLEASE, help EPCOT. This is a great park that is suffering and dwindling.  Go back to the thoughts of project Genesis for Epcot.  Future world will never work because the future always comes.   They still make more money than God.  Please give back to the people while still making money.  That's my vent for the month :)

[Avatab.... Steve 124]

On 6/7/2016 at 10:51 PM, Starbuc71 said:

PLEASE, help EPCOT. This is a great park that is suffering and dwindling. 

 

Couldn't agree more. How sad is it that the EPCOT of 20 years ago was a better park than it is now.....

 

[caveat lector 181]

Everything eventually hits a tipping point. Maybe this is it

[geoffdaddy 33]

I say this partly tongue in cheek, but there's nothing wrong with Disney that a good recession wouldn't cure.