Disney Profits Soar With Theme Parks and Resorts Leading the Way
It was a huge second fiscal quarter for the Walt Disney Company, helped in large part by gains at its amusement parks and resorts.
Disney beat already lofty Wall Street forecasts with $2.1 billion in net profit, a 10 percent jump over fiscal second quarter 2014. The company reported overall 7 percent growth and an 11 percent earnings per share jump to $1.23 per share.
The parks and resorts division was one of the brightest spots in a very shiny happy report, as revenues rose 6 percent, and operating income rose a whopping 24 percent during the quarter to $566 million – the biggest gainer in the company.
The strength of the travel economy helped Disney, as the company said increased ticket prices at the theme parks and its cruise line and higher room rates at its resorts did not deter spending. Food, beverage and merchandise spending all jumped.
Disney CFO Jay Rasulo told a conference call of investors that occupancy is up 2.5 points to 89 percent at its domestic hotels with per-room spending up 6 percent. Rasulo said reservations are tracking at a 7 percent increase for this quarter.
Walt Disney World Resort in Florida continues to show attendance growth, while other domestic and international parks lagged during the quarter. Attendance was down at Disneyland Resort in California and overseas at Hong Kong Disneyland Resort.
Operating costs were also higher at Disneyland Paris and Hong Kong and construction expenses were higher than expected at Shanghai. Company officials said higher ticket prices and consumer spending at the Paris park offset some of those attendance losses. Officials also expect the Shanghai opening next year will drive an overseas park resurgence.
As for the entire company, its cable networks continue to show strong growth, while the "Frozen" franchise continues to deliver with strong merchandise sales. The company’s film division is looking for a strong year with “Avengers: Age of Ultron” set for release and hype ahead of the Dec. 18 release of “Star Wars: The Force Awakens,” an excitement “unlike anything we’ve ever seen before,” according to Disney CEO Robert A. Iger.
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