The Walt Disney Company quarterly earnings for its second fiscal quarter 2018

May 09, 2018 in "The Walt Disney Company"

Posted: Wednesday May 9, 2018 9:51am ET by WDWMAGIC Staff

Disney's Q2 earnings report was boosted by strong performance of Marvel's Black Panther movie, which passed $1 billion at the box office in just over 10 days.

At the parks, there was increased guest spending, attendance growth at Walt Disney World Resort and higher sponsorship revenue.

“Driven by strong results in our parks and resorts and studio businesses, our Q2 performance reflects our continued ability to drive significant shareholder value,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth.”

You can read the full report online, and see below for the Parks and Resorts excerpt.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 13% to $4.9 billion and segment operating income increased 27% to $1.0 billion. Operating income growth for the quarter was due to increases at our domestic and international parks and resorts. Results included a benefit from a shift in the timing of the Easter holiday relative to our fiscal periods. The current quarter included one week of the Easter holiday, whereas the entire Easter holiday fell in the third quarter of the prior year.

Higher operating income at our domestic parks and resorts was primarily due to increased guest spending, attendance growth at Walt Disney World Resort and higher sponsorship revenue, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices, average daily hotel room rates and food, beverage and merchandise spending. The increase in costs was primarily due to labor and other cost inflation, an increase in depreciation associated with new attractions and higher technology spending.

The increase at our international parks and resorts was due to growth at Disneyland Paris and higher occupied room nights and attendance at Hong Kong Disneyland Resort. These increases were partially offset by a decrease at Shanghai Disney Resort driven by lower attendance, cost inflation and an unfavorable foreign currency impact. Higher operating income at Disneyland Paris was due to increases in guest spending and attendance, partially offset by cost inflation. Guest spending growth at Disneyland Paris was due to higher average ticket prices driven by less discounting, and increases in average daily hotel room rates and food, beverage and merchandise spending.

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RteetzMay 17, 2018

The TEA also said China is expected the be the largest theme park market in the world by 2020.

jaxonpMay 17, 2018

Without a doubt, a second park will be coming to Shanghai after seeing how crazy busy it was (compatible to Magic Kingdom) a few weeks ago. That place has good infrustructure in place for expansion now. How soon is anyone's guess but I'd imagine it will come as soon as the Shanghai government gives it the go ahead.

spock8113May 17, 2018

What they fail to mention is the recent tax reform that gave big businesses reduced tax rates. That flushed in huge amounts of money to these businesses making it look like they're making bigger profits and, consequently, they buy back their own stocks raising the share prices once again making them look good, temporarily. Granted Black Panther made them money, but it's more complicated than that. As a share holder of some of these companies, good for me and them!

LuigiMay 15, 2018

Yeah...I don't tend to take the anonymous, cowardly opinions of those on Youtube with any sort of sincerity or as a meaningful reflection of civilized society. There are people who still think the Earth is flat on Youtube.

EricsBiscuitMay 10, 2018

I own class b shares. But I see your point

winstongatorMay 10, 2018

Higher revenue combined with some cost cutting. To some degree, an incremental guest adds directly to profit - park is staffed the same. Other things, hotels, food as examples, become more profitable as they get closer to 100% capacity. Breaking that down, higher prices combined with increased attendance. With Pandora, TSL & SWGE, I see continued price increase and continued increased attendance. I really only follow WDW, but it might be financial improvements internationally. The international park expansions seem pretty awesome. You can go back through the quarterly and annual reports and they give a paragraph or two of info. Annual reports have % occupancy numbers, so you can guess how that drives things.

larryzMay 10, 2018

When's the last time you bought a share of Berkshire-Hathaway? Yes, it's an extreme example, but sub-100 stocks are easier to buy and sell for non-institutional investors.

disneyflushMay 10, 2018

What do you think is causing such a drastic increase?

winstongatorMay 10, 2018

Profit margin for the Parks and Resort segment are significantly higher than 5 years ago. This quarter 5 years ago, margins were 11.6%. This past quarter they were 19.6%. That is a huge increase.

Frankie The BeerMay 10, 2018

That's not how a split works. If a stock splits its usually priced high and scares investors to stop buying it, a split lowers the price and gets it active again. Second about value. No matter how many shares a stock splits it will always have the same value of what it did before the split. Disney right now could have a value of say 100 billion dollars. If it splits 4 to 1, its still values at 100 billion dollars. If it earns value after the split, say 200 billion dollars if the split never took place it would still be worth 200 billion dollars but the stock price would be very high. Splits don't make you money, they just make it easier for traders.

Kman101May 10, 2018

Personally I don't think he is. I'm not excited for Solo at all. I wish I were. I'm not in any rush to see it.

EricsBiscuitMay 10, 2018

No because if you didn't split the shares would be $200. Look at Brk-A. Splitting is a dumb move. It's a waste of time.

MichWolvMay 10, 2018

BairstowMay 10, 2018

So you don't think there is a large contingent in this country opposed to the sort of racial and gender inclusivity championed by a movie like Wrinkle? Because I need only to direct you to the comment section of any of its trailers on YouTube to show you that it exists.