Walt Disney Company Third Quarter 2018 Earnings report shows gains in the parks and resorts

Aug 08, 2018 in "The Walt Disney Company"

Posted: Wednesday August 8, 2018 10:06am ET by WDWMAGIC Staff

The Walt Disney Company reported its third quarter earnings yesterday, and Parks and Resorts continue to be a strong earner for the company. Parks and Resorts revenues for the quarter increased 6% to $5.2 billion and segment operating income increased 15% to $1.3 billion.

Higher operating income at domestic parks was due to an increase in guest spending. Per-capita spending was up, driven by higher admission costs and an increase in food and merchandise spending. Per room spending at the resorts was up 8%. Attendance at the theme parks was up 1% in the quarter. Resort occupancy was down 2% to 86%, due to reduced room inventory from room refurbishment and conversions. For this quarter Resort reservations are down 2% compared to prior year, while booked rates are pacing up 7%.

“We’re pleased with our results in the quarter, including a double-digit increase in earnings per share, and excited about the opportunities ahead for continued growth,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Having earned the overwhelming support of shareholders, we are more enthusiastic about the 21st Century Fox acquisition than ever, and confident in our ability to fully leverage these assets along with our own incredible brands, franchises and businesses to drive significant value across the entire company.”

Below is the full Parks and Report section from the report, which you can view in its entirety here.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 6% to $5.2 billion and segment operating income increased 15% to $1.3 billion. Operating income growth for the quarter was due to increases across key operations. Results include an unfavorable impact due to the timing of the Easter holiday relative to our fiscal periods. One week of the Easter holiday fell in the third quarter of the current year whereas both holiday weeks fell in the third quarter of the prior year.

Higher operating income at our domestic parks and resorts was due to increased guest spending, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices, food, beverage and merchandise spending and average daily hotel room rates. The increase in costs was due to labor and other cost inflation, partially offset by lower marketing costs. At our cruise line, growth was driven by higher passenger cruise days, which was primarily due to the Disney Fantasy dry-dock in the prior-year quarter.

The increased operating income at our international parks and resorts was due to growth at Shanghai Disney Resort and Hong Kong Disneyland Resort. Higher operating income at Shanghai Disney Resort was due to lower costs and attendance growth, partially offset by decreased guest spending. The decrease in guest spending was driven by lower average ticket prices, partially offset by higher food and beverage spending. At Hong Kong Disneyland Resort, the increase in operating income was primarily due to higher occupied room nights, average ticket prices and attendance.

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MisterPenguinAug 10, 2018

The transcript of the call is now available: https://www.thewaltdisneycompany.com/wp-content/uploads/2018/08/q3-fy18-earnings-transcript.pdf Highlights.. Disney App Trio (available a la carte or packaged) Disney Now (streaming app) successor at the end of 2019 biggest priority for Disney will include: Pixar, Marvel, Disney, NatGeo, LucasFilm Star Wars will include: live action SW; new Clone Wars; HS Musical, Monsters Inc.; Lady and Tramp; New Marvel (TV) won’t need the volume of Netflix because of value of content lower price than Netflix because of lower volume starting in 2019, all new Disney movies are ‘unencumbered’, i.e., they won’t be licensed to be distributed by anyone else older movies that are encumbered will eventually revert by 2024, or, license sharing deals can be brokered Hulu will own 60% ESPN+ Subs to ESPN+ so far are exceeding expectation will include: UFC, Boxing, College Football and other college, the usual sports and soccer move some ESPN channel properties to + commitment to invest and grow… FX NatGeo (concern over environment and eco-tourism) FoxSearchlight Fox TV Studio Fox Movie Studio (Deadpool, Avatar, X-Men, F4, Apes, Kingsmen) Looking to license their streaming content to other distributors, too Parks: looking to increase margin with “yield management”, i.e., adjusting prices to what the market can bear

Kman101Aug 09, 2018

Shouldn't we be due for an increase there? I can't keep up with them. How soon before they're charging $30 for parking? Can you imagine? Parking should be included with admission, period. But I get it, from a "we want your money 'business perspective'"

jbolen2Aug 09, 2018

I wonder what the dollar amount in that increase is from the parking fees?

Kman101Aug 09, 2018

You mean no For Rent/Sale sign going up outside of the magical entrance gate? It's cute they operate like it's 2001 or 2008 and they think they're going to collapse tomorrow. Nope, sorry can't have more entertainment, we have to cut to give you anything new.

CaptainAmericaAug 09, 2018

VERY fake news @MansionButler84 is an ENEMY of "Disney fans" everywhere! Hiding his own failure by leading a WITCH HUNT against Bob Iger's mission to Make Disney Great Again. Sad!

MansionButler84Aug 09, 2018

You left out some CAPS and exclamation points.

Edward JacksonAug 09, 2018

It really is sad, a once great company reduced to this. I mean what can they expect. They only have 5 of the top 11 movies worldwide, this year, with sales totaling $5,262,900,000. I am pretty sure the parks are going to be closing pretty soon also.

MisterPenguinAug 09, 2018

So, "analysts were expecting" Disney's 3Q revenue to be $15.34 Billion in 2018. In 2017, it was $14.24 Billion. But Disney missed the mark hugely with a measly $15.23 Billion. It was only a disappointingly paltry $1.1 Billion gain. Disney fell short by a whopping 0.7% Clearly Disney is failing. Sad.

eliza61nycAug 08, 2018

Lol well park attendance up (although only 1%) and spending up, someones got to be a little happy. Do people spend their money for things that make them unhappy.

Edward JacksonAug 08, 2018

This could also just be some people taking some profit. Take a look at the stock price over, just the last few weeks. I has gone up quite a bit. Close to a 10% increase. Sell high, the buy low, rinse and repeat.

GlasgowAug 08, 2018

*Voice of Jack Sparrow* But why are the straws gone?

World_Showcase_Lover007Aug 08, 2018

Doubt Iger mentions anything along the lines of “we gave people a good product for a fair price, and made people happy.”

HauntedPirateAug 08, 2018

#MeToo ;) Not enough revenue to satisfy the stock ANALysts, though, as despite generating nearly $3 billion in net income the stock has dropped almost $2/share today. Stock analysts are almost as bad as lawyers. You can have a solid business plan and have solid profits year after year, but if you don't meet some idiot stock analyst expectations, your stock tanks. But if you lose money and have a shaky business plan (*coughDotComBubblecough*) but meet stock analyst expectations, your stock soars. It's just so wrong...

wsmith1978Aug 08, 2018

I see more dessert parties in the near future.