Luv2Roam
DIS Veteran
- Joined
- Jun 3, 2000
I thought this interesting to see that what is happening now to Disney stock was really of no great surprise:
Disney Caught in a Better Mousetrap
Disney missed its fourth-quarter financial targets, and fiscal 2002 is only going to get worse. With weakness at the company's core media networks and theme parks, the entertainment conglomerate is looking at a bumpy -- and Grumpy -- road ahead.
By Rick Aristotle Munarriz (TMF Edible)
November 9, 2001
Last month, Disney (NYSE: DIS) closed down its Carousel of Progress attraction at Florida's Magic Kingdom. The attraction, Walt's pride and joy during the World's Fair glory days, featured a revolving theater through whitewashed scenes depicting advances in 20th-Century technology.
But it had grown stale from Disney's cost-cutting perspective. In short, flipping the switch was a symbolic gesture: Disney was putting an end to Progress.
Last night, the company reported a lackluster close to its fiscal year. The company that routinely managed to talk analysts just where it wanted them -- a penny or two shy of actual results -- wound up on the short end of the stick this time. With a paltry $132 million in operating income, or $0.06 a share, it was Disney's turn to miss the market's consensus by a penny.
Quarterly revenue dipped from $6.1 billion to just $5.8 billion year-over-year, as everything from the sluggish economy to the troubled ad market to the frightened tourist market teamed up to rough up the Mouse.
It's grim stuff, but the worst is yet to come.
So far in the company's December quarter, park attendance in Florida is off by a whopping 25%. With occupancy at its Disney World and Disneyland resort hotels down by 20% and 15% respectively, "I'm going to Disney World" seems a battle cry lost somewhere over the barren Fantasyland concrete.
As for its broadcasting arm, the once mighty ABC can't seem to find a single show to buy its way into the Nielsen weekly Top 10. While ABC finished last year as the top network, this season it looks to be a lock to finishing third. With ad rates still in a rut, is there anything worse than being a laggard in a slumping sector? Besides being anchored beside an It's a Small World song and dance set?
And that Monsters Inc. lit up the box office this past weekend only serves to show up Disney's own in-house animation inadequacies, as the house Walt's mouse built has to split the take with the company that has out-Disneyed Disney: Pixar (Nasdaq: PIXR).
There is clearly potential for celluloid even during an entertainment-starved recession. This is shaping up to be a record-breaking $8 billion year for the movie industry. Unfortunately, it is AOL Time Warner (NYSE: AOL) holding the two aces left in 2001's stacked deck with Harry Potter and Lord of the Rings.
So where does that leave Disney? With the company expecting operating profits to fall by between 10% and 15% through the rest of fiscal 2002, it's easy to reflect back to the Carousel of Progress. The attraction's catchy theme song -- and those of you who know it can sing along now -- went like this:
"It's a great big beautiful tomorrow, shining at the end of every day."
Oh, now I get it. Disney just had to shut the thing down. After all, there has to be some truth in corporate advertising.
Disney Caught in a Better Mousetrap
Disney missed its fourth-quarter financial targets, and fiscal 2002 is only going to get worse. With weakness at the company's core media networks and theme parks, the entertainment conglomerate is looking at a bumpy -- and Grumpy -- road ahead.
By Rick Aristotle Munarriz (TMF Edible)
November 9, 2001
Last month, Disney (NYSE: DIS) closed down its Carousel of Progress attraction at Florida's Magic Kingdom. The attraction, Walt's pride and joy during the World's Fair glory days, featured a revolving theater through whitewashed scenes depicting advances in 20th-Century technology.
But it had grown stale from Disney's cost-cutting perspective. In short, flipping the switch was a symbolic gesture: Disney was putting an end to Progress.
Last night, the company reported a lackluster close to its fiscal year. The company that routinely managed to talk analysts just where it wanted them -- a penny or two shy of actual results -- wound up on the short end of the stick this time. With a paltry $132 million in operating income, or $0.06 a share, it was Disney's turn to miss the market's consensus by a penny.
Quarterly revenue dipped from $6.1 billion to just $5.8 billion year-over-year, as everything from the sluggish economy to the troubled ad market to the frightened tourist market teamed up to rough up the Mouse.
It's grim stuff, but the worst is yet to come.
So far in the company's December quarter, park attendance in Florida is off by a whopping 25%. With occupancy at its Disney World and Disneyland resort hotels down by 20% and 15% respectively, "I'm going to Disney World" seems a battle cry lost somewhere over the barren Fantasyland concrete.
As for its broadcasting arm, the once mighty ABC can't seem to find a single show to buy its way into the Nielsen weekly Top 10. While ABC finished last year as the top network, this season it looks to be a lock to finishing third. With ad rates still in a rut, is there anything worse than being a laggard in a slumping sector? Besides being anchored beside an It's a Small World song and dance set?
And that Monsters Inc. lit up the box office this past weekend only serves to show up Disney's own in-house animation inadequacies, as the house Walt's mouse built has to split the take with the company that has out-Disneyed Disney: Pixar (Nasdaq: PIXR).
There is clearly potential for celluloid even during an entertainment-starved recession. This is shaping up to be a record-breaking $8 billion year for the movie industry. Unfortunately, it is AOL Time Warner (NYSE: AOL) holding the two aces left in 2001's stacked deck with Harry Potter and Lord of the Rings.
So where does that leave Disney? With the company expecting operating profits to fall by between 10% and 15% through the rest of fiscal 2002, it's easy to reflect back to the Carousel of Progress. The attraction's catchy theme song -- and those of you who know it can sing along now -- went like this:
"It's a great big beautiful tomorrow, shining at the end of every day."
Oh, now I get it. Disney just had to shut the thing down. After all, there has to be some truth in corporate advertising.
