Ed
11-07-2008, 06:29 AM
Disney revives hotel discount
Scott Powers
Sentinel Staff Writer
November 7, 2008
Walt Disney Co. announced its first major hotel discounts in years Thursday to counter a "sobering" economic outlook for 2009, after reporting lower profit in its most recent quarter because of a decline in movie and theme-park earnings and losses from the bankruptcy of one of Wall Street's giant investment firms.
Disney President and Chief Executive Officer Bob Iger said early hotel bookings for 2009 are down "considerably," though he also said "it's just too early to tell" whether that's more the result of people delaying their vacation plans or canceling them altogether.
"Our brand and the experiences we offer have never been stronger. But consumer confidence is the lowest we've seen in over three decades," Iger said, noting that retail spending is also down. "That could impact us possibly during the holiday season but almost certainly during 2009."
Disney is bringing back a deal it last offered in 2003: For most of the first six months of next year, vacationers can get seven nights in Disney World hotels for the price of four. Those who book vacations for January, February or March will also get a voucher for $200 worth of food and souvenirs. For either deal, reservations must be made by Dec. 20.
Disney's revenue was up companywide by 6 percent to $9.45 billion in its fiscal fourth quarter, which ended Sept. 27. But profit fell 13 percent compared with the same three months last year, to $760 million.
Iger pointed to the first indications of a softening theme-park business in the quarterly report: Though attendance at Walt Disney World was actually up slightly again, attendance fell at most of the company's other parks, including Disneyland. And even with the slight attendance gains at Disney World, the parks-and-resorts division's profit fell 4 percent during the fourth quarter compared with a year earlier.
"I realize this is a sobering outlook," Iger said, "but we are extremely confident in our ability to contend with current conditions, and to rebound when they improve."
The decline in the park's operating profit contributed a bit to the parent company's $117 million drop in fourth-quarter net profit. The company's movie studios also hurt the bottom line because of "weaker"-performing movies and DVDs than those released in 2007. But a big contributor was a $91 million bad debt from the failed investment bank Lehman Brothers.
Disney reported fully diluted earnings of 40 cents a share in the fourth quarter, down from 44 cents last year and well short of the 49 cents a share that analysts had expected according to a poll by Thomson Reuters.
For the full fiscal year, Disney earnings totaled $2.28 a share, up from $2.24 last year.
Revenue for the entire year totaled $37.84 billion, up 7 percent, while net profit fell 6 percent to $4.43 billion.
"This is clearly a difficult and unpredictable time," Iger said, "and while our businesses aren't immune, the strength of our assets, brands and management team positions us well for the long term."
The theme-park division had revenue of $2.97 billion in the fourth quarter, up 7 percent from the same period last year. The 4 percent decrease in operating profit left the unit with $412 million. For the year, parks and resorts reported an 8 percent increase in revenue, to $11.5 billion, and an 11 percent rise in operating profit, to $1.9 billion, thanks to a strong winter and spring.
"For the quarter, decreased results in the domestic operations reflected higher costs, which included labor and other cost inflation at Walt Disney World Resort, and higher fuel and dry-dock maintenance costs at Disney Cruise Line, partially offset by higher guest spending at Walt Disney World Resort," the company said in its earnings report.
Scott Powers
Sentinel Staff Writer
November 7, 2008
Walt Disney Co. announced its first major hotel discounts in years Thursday to counter a "sobering" economic outlook for 2009, after reporting lower profit in its most recent quarter because of a decline in movie and theme-park earnings and losses from the bankruptcy of one of Wall Street's giant investment firms.
Disney President and Chief Executive Officer Bob Iger said early hotel bookings for 2009 are down "considerably," though he also said "it's just too early to tell" whether that's more the result of people delaying their vacation plans or canceling them altogether.
"Our brand and the experiences we offer have never been stronger. But consumer confidence is the lowest we've seen in over three decades," Iger said, noting that retail spending is also down. "That could impact us possibly during the holiday season but almost certainly during 2009."
Disney is bringing back a deal it last offered in 2003: For most of the first six months of next year, vacationers can get seven nights in Disney World hotels for the price of four. Those who book vacations for January, February or March will also get a voucher for $200 worth of food and souvenirs. For either deal, reservations must be made by Dec. 20.
Disney's revenue was up companywide by 6 percent to $9.45 billion in its fiscal fourth quarter, which ended Sept. 27. But profit fell 13 percent compared with the same three months last year, to $760 million.
Iger pointed to the first indications of a softening theme-park business in the quarterly report: Though attendance at Walt Disney World was actually up slightly again, attendance fell at most of the company's other parks, including Disneyland. And even with the slight attendance gains at Disney World, the parks-and-resorts division's profit fell 4 percent during the fourth quarter compared with a year earlier.
"I realize this is a sobering outlook," Iger said, "but we are extremely confident in our ability to contend with current conditions, and to rebound when they improve."
The decline in the park's operating profit contributed a bit to the parent company's $117 million drop in fourth-quarter net profit. The company's movie studios also hurt the bottom line because of "weaker"-performing movies and DVDs than those released in 2007. But a big contributor was a $91 million bad debt from the failed investment bank Lehman Brothers.
Disney reported fully diluted earnings of 40 cents a share in the fourth quarter, down from 44 cents last year and well short of the 49 cents a share that analysts had expected according to a poll by Thomson Reuters.
For the full fiscal year, Disney earnings totaled $2.28 a share, up from $2.24 last year.
Revenue for the entire year totaled $37.84 billion, up 7 percent, while net profit fell 6 percent to $4.43 billion.
"This is clearly a difficult and unpredictable time," Iger said, "and while our businesses aren't immune, the strength of our assets, brands and management team positions us well for the long term."
The theme-park division had revenue of $2.97 billion in the fourth quarter, up 7 percent from the same period last year. The 4 percent decrease in operating profit left the unit with $412 million. For the year, parks and resorts reported an 8 percent increase in revenue, to $11.5 billion, and an 11 percent rise in operating profit, to $1.9 billion, thanks to a strong winter and spring.
"For the quarter, decreased results in the domestic operations reflected higher costs, which included labor and other cost inflation at Walt Disney World Resort, and higher fuel and dry-dock maintenance costs at Disney Cruise Line, partially offset by higher guest spending at Walt Disney World Resort," the company said in its earnings report.