Disney ends fiscal year with record revenue and profit

And once their switch to the dark side is complete, expect even more money to come rolling in.

Fear the economy! Oh wait, crap, the election is over.

You keep saying that - and point taken - but I'm still not convinced the amusement park industry is an accurate barometer for the economy at large.

 If people can afford to vacation to Disney, then the current economic conditions aren't forcing a significant number of people to change their spending habits. Unemployment is higher than we would like, but businesses are certainly not failing left and right.

the amusement park industry

I'm not sure Disney is "the amusement park industry" though. I haven't read this year's report, but if memory serves, the most reliable margins come from Networks (particularly, ESPN). The bulk of their revenue (and a good chunk of profit, depending on the year) comes from Studios. Finally, the Parks & Resorts segment is built around "destination vacations" for the most part, excepting possibly only Disneyland. That's particularly true for WDW and DCL.

I'll have to read this year's Annual to see if that fits with my assumptions.

That was my point. As much as we want to paint the parks as luxury vacations, it isn't the bulk of their revenue. Ad spending on the networks in particular tend to have some correlation to consumer spending.

Well, it's not just the Disney reports you've made the comment in. It's just the one I chose to reply to.

Pretend I replied to this one instead if you must:

http://coasterbuzz.com/Forums/Topic/six-flags-profit-up-on-higher-a...ces#871708

Or this one:

http://coasterbuzz.com/Forums/Topic/cedar-fair-announces-results-wi...013#872077

My greater point is that I don't buy theme park companies reports as an indicator that the economy is fine.

If anything, given the fact that we talk all the time about the great value parks offer and what a steal a day at the park or a season pass is, one could possibly argue that people are looking to spend less or get the most bang for their buck and one of the winners of the bad economy is the amusement industry.

With all of that said, I don't neccessarily disagree that the economy isn't as bad as as the fear mongering would lead you to believe. I just wouldn't be making my stand in the same place you are.

I was wrong about Studios being a revenue-generator. It is a distant 3rd (a bit under $6B) to Networks (about $19.5B) and P&R (almost $13B).

Networks margin: 34% (!)

P&R margin: ~15%

Studio margin: ~12%.

However, despite Studios' small "bottom-line" performance, it's hard to imagine the P&R segment existing without the constant infusion of IP from Studios. But, basically, it's ESPN plus a bunch of other less-successful businesses.

Lord Gonchar said:

Well, it's not just the Disney reports you've made the comment in. It's just the one I chose to reply to.

Oh my God, dude, I'm mostly just injecting hyperbole into an already silly cultural state. I'm not presenting a dissertation. At issue is not whether or not amusement companies are a leading economic indicator of recovery, but if things were really as bad as politicians would like us to believe (so we can vote for them), I somehow doubt these companies would be posting record results.

Then again, if people are big enough morons to get into mortgages they can't afford, perhaps buying tickets for Six Flags in lieu of eating isn't that far fetched.

Jeff said:

...if things were really as bad as politicians would like us to believe (so we can vote for them), I somehow doubt these companies would be posting record results.

I'm simply questioning that logic.

Travel generally is also up, though...not just el-cheapo amusement parks.

Hertz up: http://www.reuters.com/article/2012/11/01/uk-hertz-results-idUSLNE8A000P20121101

AMEX forecast up: http://www.marketwatch.com/story/american-express-sees-business-tra...atest_news

Hotel rates up: http://www.nytimes.com/2012/11/06/business/travel-managers-brace-fo...rates.html

So, while you might be right that amusement parks do not foreshadow travel generally, they seem to be correlated at the moment.

Travel also includes business travel, I would assume and that's a-whole-nother beast. (and it seems to be what all of these articles are talking about)

Speaking of which, the only part of the WSJ AmEx article I can access is talking about how business travel in Latin America is ready to explode. Is that really an indicator?

Feel free to school me, but now that I'm looking closer, all of those articles seem to be talking about business, not leisure, markets.

Again, I'm not necessarily disagreeing on the economy. And I'm certainly not questioning a general travel recovery.

I'm questioning the choice of amusement parks performance as an indicator of general economy health...even if it is oozing in hyperbole.

(And I'm also tryng to set a record for the use of the word "indicator" in one post)

Travel also includes business travel, I would assume and that's a-whole-nother beast.

Yes, but business travel is also sensitive to economic conditions---and your complaint is tying to "the economy" not "leisure travel demand." What's more, it is much easier to replace a business trip with a Citrix or WebEx session than it is a trip to the Grand Canyon.

Instead, if you'd like to narrow to leisure travel demand, you just lose, because Disney is a "destination" leisure travel provider, and they are also up.

As someone who was long-term unemployed, I can say for fact the economy and unemployment issues are regional. Here in Columbus we can't find enough good workers for the jobs available. Yet, one can drive 2 hours north to Cleveland/Akron and jobs are not easy to come by still (though improving.)

I've long said that the 80% of the country who never lost a job or where impacted by the Great Recession have totally moved on and are back to their lives pre-financial meltdown. They may not be splurging to the level they were prior to 2008 but they certainly are spending again. In the retail industry, major retailers here in Columbus are experiencing 10%+ comps over last year which is huge.

One has to ask why then the RNC sent a message to Governor Kasich (R-OH) not to talk about Ohio's improving economy (or booming economy specifically in CMH) the past 6 months prior to the election?!?

Brian Noble said:

Yes, but business travel is also sensitive to economic conditions---and your complaint is tying to "the economy" not "leisure travel demand."

Instead, if you'd like to narrow to leisure travel demand, you just lose, because Disney is a "destination" leisure travel provider, and they are also up.

Fair enough, I guess. So I'm to believe looking at the travel industry tells me all I need to know about the state of the economy? Because that just doesn't add up to me. Which is what I've been trying to say since square 1.

I'm just going to copy and paste my exact words from my previous post because I'm starting to fear that I don't understand what's happening here:

"Again, I'm not necessarily disagreeing on the economy. And I'm certainly not questioning a general travel recovery. I'm questioning the choice of amusement parks performance as an indicator of general economy health...even if it is oozing in hyperbole."

So I'm to believe looking at the travel industry tells me all I need to know about the state of the economy?

Well, it could. It captures both business' willingness to spend on new opportunities as well as consumer sentiment. I suppose we could pick other segments of the economy to measure, but this is a coaster enthusiast board, so...

During "The Great Depression" a lot of amusement parks closed, during this recession Disney spent billions on two expansions and has record profits. Could mean any number of things.

One would argue that the depths of a recession are an opportunity to invest for when things get better, because they will be better positioned against competition on the ascent. Of course, to do that, you have to be Disney, who has the resources. It's also a good time to invest in yourself, for the same reasons.

Labor and materials are often cheaper during a recession, as well---another good reason to make investments then.