[Park Hopper]

Bolstered by the performance of Walt Disney World, The Walt Disney Company is reporting a 21 percent increase in profits from the same period a year ago. Here's the story:

Disney profits up 21 percent
By Jerry Jackson
Sentinel Staff Writer

August 10, 2004, 5:27 PM EDT

Led by a strong performance by Walt Disney World, the Walt Disney Co. reported today that third-quarter profit rose 21 percent from the same period a year ago.

Revenue increased 17 percent to $7.4 billion. Profit rose to $604 million, or 29 cents a share, up from $502 million, or 24 cents.

The parks and resorts division posted a 32 percent increase in revenue to $2.3 billion, and operating profit for the division rose 20 percent to $421 million.

Walt Disney World in Orlando is the main contributor to the division's revenue and profit, and the company cited higher attendance and occupancy at Walt Disney World as a factor in the healthy third fiscal quarter ended June 30.

Revenue for the division rose by $557 million, with $332 million of that increase coming as a result of consolidating Euro Disney and Hong Kong Disneyland on the company's books. New accounting rules now require the company to more fully report the revenue and income from those overseas operations.

The company said the remaining $225 million increase in theme park and resort revenue was "primarily due to higher theme park attendance and hotel occupancy at Walt Disney World Resort."

Disney took a charge against earnings of $56 million, or 2 cents per share, during the quarter to account for the proposed sale of the Disney Stores and other store closings in North America.

Chief Executive Officer Michael Eisner said the continued growth in earnings, helped by higher ad revenue at ESPN, has the company on track to deliver more than 50 percent growth in earnings for the year, as predicted last quarter.

"Equally important, our strong earnings and cash flow growth demonstrate the overall strength of our businesses," Eisner said in a statement.

[inluvwithdisney]

Disney is definitely not hurting are they????

[Park Hopper]

Originally Posted by inluvwithdisney

Disney is definitely not hurting are they????

No, they're not. And with a jump in profits like that we can all forget about the movement to dump Michael Eisner.

[Metalfan]

Yeah I saw that earlier today when I woke up.....as long as Disney is doing good Im happy. They said it was beyoond expectations and unusually high for this type of time. With the terrorism stuff and people not traveling.

[trilliumB]

What I'd like to see is some of those profits being re-invested into the parks & resorts, in the form of reversing various 'austerity measures', e.g., facilities upkeep. It seems to me that one of the big problems with the Eisner-style business management (besides putting profits above people) is that the goal is to create ever-increasing profit margins. At first, these come from increasing efficiency (mostly a good thing, and usually there's quite a bit of room for this at the start of an overhaul), but then, if sales don't increase enough over time to give the continued upswing they're looking for (and sales take time to respond, and are governed by lots of outside forces), the margin must continue to be created by chipping away from underneath, and we move into 'austerity' measures. If sales stay flat or drop over a long enough period (or if the cost-cutting rate is too aggressive to keep up with), we end up with a real deficit on the providing end, that negatively impacts the product to the point that it pushes sales down further (when it becomes noticeable to customers).

It seems to me that the degradation in services over time has hit critical mass at this point in time, with customers now vocally protesting. At the same moment, outside factors have brought an upsurge in sales. I think the confluence is dangerous due to the possibilty that WDW management may draw the erroneous conclusion that the upsurge in tourism (happening everywhere, I think?) despite the degraded service means that it is 'OK' with people to leave it at this level. But I would guess that people are running on their previous memories, or the reputation of WDW built from the past. If the degraded service level is left in place, I think it will erode their attendance in the future. What a vicious cycle, eh?

[skwak]

Originally Posted by trilliumB

What I'd like to see is some of those profits being re-invested into the parks & resorts, in the form of reversing various 'austerity measures', e.g., facilities upkeep. It seems to me that one of the big problems with the Eisner-style business management (besides putting profits above people) is that the goal is to create ever-increasing profit margins. At first, these come from increasing efficiency (mostly a good thing, and usually there's quite a bit of room for this at the start of an overhaul), but then, if sales don't increase enough over time to give the continued upswing they're looking for (and sales take time to respond, and are governed by lots of outside forces), the margin must continue to be created by chipping away from underneath, and we move into 'austerity' measures. If sales stay flat or drop over a long enough period (or if the cost-cutting rate is too aggressive to keep up with), we end up with a real deficit on the providing end, that negatively impacts the product to the point that it pushes sales down further (when it becomes noticeable to customers).

It seems to me that the degradation in services over time has hit critical mass at this point in time, with customers now vocally protesting. At the same moment, outside factors have brought an upsurge in sales. I think the confluence is dangerous due to the possibilty that WDW management may draw the erroneous conclusion that the upsurge in tourism (happening everywhere, I think?) despite the degraded service means that it is 'OK' with people to leave it at this level. But I would guess that people are running on their previous memories, or the reputation of WDW built from the past. If the degraded service level is left in place, I think it will erode their attendance in the future. What a vicious cycle, eh?

Hi,

I read your post and can appreciate your feelings.

We have only been going to WDW for the past 5 years so I admit that I do not have the history of the service levels that some people discuss on the DC. However, I think the service level is actually pretty high. And since I work in QA for Tiffany & Co., I consider myself pretty picky (can't help it, it warps you to work there kinda like Disney).

Certainly, there are always ways to improve. However, they seem to be putting a small fortune into many of the new attractions which I feel is very positive.

I'm not a big Eisner fan but I do give his team credit for what they have achieved.

Overall, I think the fact the the parks are the moneymaker bodes well for future investments which is great for all of us.

[BDavis932]

I'm proud to say that I helped contribute to increase their bottom line!!! I'm happy to help again next year, too!

[skwak]

Originally Posted by BDavis932

I'm proud to say that I helped contribute to increase their bottom line!!! I'm happy to help again next year, too!

Doing our best also!!!!

[downsouthtigger]

Hmmph, only 21% jump in profits, I figured it would be more.
In business terms yes that good and I should be happy, but I would be more happy if it was due to park attendance and such. Post 9/11 attendance has been up, but then again I contribute the profit increase more to ticket prices. Maybe I am looking at this the wrong way, but if Park attendance was up, with the ticket increase, I think it would lead to a bigger jump than 20%.
I'm with trilliumB about they need to invest some of that money back. Also take that money and invest in better training. As for my last visit, although I know they were CP, seems that the entry level park folks are becoming more and more like the jerks you find at local carnies. Thats all I want to say about that, so yeah great jump in profits, but I would like them to be higher and for them to be actually soemthing that matters. Ok I re-read it and it says its primarily due to attendance and of course the orlando parks, but still I don't know I just hoped for a bigger jump. More attendance means I will still have a job, lol!!!!