Posted Wednesday, August 9, 2006 9:34 AM | Contributed by Jeff
The Walt Disney Company today reported earnings for the third quarter and nine months ended July 1, 2006. Diluted earnings per share (EPS) for the third quarter increased 36% to $0.53, compared to $0.39 in the prior-year quarter. For the nine-month period, EPS increased 24% to $1.28, compared to $1.03 in the prior-year period. Net income for the third quarter and nine months ended July 1, 2006 was favorably impacted by a $30 million net benefit associated with the completion of the Pixar transaction. EPS was also impacted by the dilution from the shares issued in the Pixar acquisition.
Parks and Resorts revenues for the quarter increased 11% to $2.7 billion and segment operating income grew 26% to $549 million due to increases at both domestic resorts and at Disneyland Resort Paris. Operating income growth at domestic resorts was primarily due to increased guest spending, theme park attendance and hotel occupancy.
Read the press release from Business Wire.
Wednesday, August 9, 2006 11:29 AM
Revenue up 11%, so they increase the gate price. Makes good sense.
Wednesday, August 9, 2006 1:37 PM
Yeah, I questioned the same thing. I guess an 11% increase in revenue just doesn't cut it these days.
Wednesday, August 9, 2006 3:05 PM
Well I would assume it's also to project ahead to maintain that budget and keep the cash flowing for whatever improvements they'd like to make on the property.
Wednesday, August 9, 2006 3:19 PM
And people say $100M rides don't pay for themselves...
Wednesday, August 9, 2006 3:24 PM
Depends on how well that $100 million was spent right? I understand a certain version on Winnie the Pooh cost about $30 million. I'd imagine that it has yet to pay for itself.
Wednesday, August 9, 2006 4:00 PM
Revenue HAS to be up. They raised prices not too long ago so people had no choice but to spend more money right off the bat.
I'm a big Disney supporter and I usually agree with what they do but I think close to $70 is a lot for a day at a theme park, regardless of how nice it is.
Wednesday, August 9, 2006 5:54 PM
And they don't give soda can discounts either. I guess the message is don't bother coming for just one day.*** This post was edited by RatherGoodBear 8/9/2006 5:55:04 PM ***
Hanging n' Banging
Wednesday, August 9, 2006 6:06 PM
I submit that Disney’s recent price increase has nothing to do directly with "getting $4 more for each gate click"... Remember that recently Disney (WDW) changed their entire admission philosophy - that is, if you visit for one or two days, you basically get ripped off. However if you stay 5-7 days, you get a real bargain. The model drives length of stay.
Perhaps someone in the Disney organization can validate that the new admission model is working, and families are staying longer, thus driving revenue and occupancy.
So the $4 price increase may just reflect how the model is working and Disney wants to further de-value the one and two day options to further drive visits in the 4 day + range. It's an act of genius if you ask me. Come for a day or two and get bent over, but stay for a week and you get a real bargain….. I know when I went to WDW this past spring, the “volume discount” admission model got an extra 2 days out of me because a five day vacation wasn't much more than a three day....
Wednesday, August 9, 2006 6:56 PM
I guess the message is don't bother coming for just one day.
I'd say you're exactly right.
In fact, I did in the other news item with:
"Disney clearly does not want you to visit one park for one day."
And I said it on January 5th of this year when all of Orlando raised ticket prices with:
"Clearly they know they have tons to offer and are a multi-day destination. They don't want you there for one day. If you try to pull that, it means you're frequenting the competition and you'll pay for it. In addition, the longer you stay, the more you'll spend in park and the more likely you are to stay at their hotels or use their other upcharge services. No one is really paying $63 a day to visit WDW. No one. It's a scare tactic to keep you there and in turn spend even more in the long run (which is fine as for most this is THE vacation) all under the guise of those magical words - 'perceived value'"
And while I'm sure much of it has to do with keeping you there, it also has just as much to do with keeping you out of Universal, Sea World, Busch, Old Town, Cyress Gardens and the various tourist traps.
Funny how history (especially amusement park history) keeps repeating itself. (I've noticed I repeat myself quite a bit too ;) )
Wednesday, August 9, 2006 8:16 PM
What's amazing, is that the third quarter *last* year saw the beginning of the Happiest Homecoming (DL)/Celebration (WDW) on Earth---itself a record-breaking period. I actually expected a slight downward trend this summer compared to last, but apparently it's not happening.
Thursday, August 10, 2006 12:19 AM
And honestly, I suspect the multi-day type people are exactly who you want anyway, because they can afford to spend more in the first place. I'd do everything I could to keep them there as well!
Thursday, August 10, 2006 7:38 AM
I wonder if Disney is catering to families with money or to teens with season passes?
Thursday, August 10, 2006 2:11 PM
If you are planning to go to WDW more than one time the best option would be to buy a 7 day pass that doesnt expire. So if you only use a few days now you can use the other dsays later when you know the prices will be even more. I still have days left from a visit 2 years ago and will be happy to use them next year which will be a big savings.And this article talks about different ticket options.
*** This post was edited by Jeff 8/10/2006 2:51:12 PM ***
Friday, August 11, 2006 8:43 AM
We went for our honeymoon last year and stayed 7 days. I think in that time we dropped around 6 hundred and thats not including meals. That was just souvenirs and drinks (many of those at the pool side bar each night). We wouldn't have spent nearly that much if we'd only been there for a day. One of the big reasons we bought as much as we did is that we could send it back to the hotel. We didn't have to carry anything around, so it made things much easier. Now we're looking to go back, I'm just going to have to make sure I save money for the souvenirs.