Wall Street Watch: Disney's Turnstiles Are Clicking Faster Than Its Studios

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Mickey Mouse Disney EarningsDisney (DIS) is still benefiting from vacationers flocking to its global chain of theme parks. Even so, the family entertainment giant posted mixed quarterly results after Thursday's market close.

Revenue climbed just 3% to $42.3 billion in its fiscal fourth quarter, but net income soared 18%. But perhaps the most surprising nugget for Disney is that, of its five segments, theme parks continue to be its fastest growing segment.

Disney's parks and resorts posted a 9% uptick in revenue for the quarter and a 10% boost for the entire fiscal year. It was the fastest growing division at Disney for both the quarter and the entire fiscal year.

Those assuming that Disney's ESPN-led networks, movies studios, interactive software, or consumer products divisions would be leading the way in terms of top-line growth now just look goofy -- or Goofy.

Despite Disney's beefy investments in expanding its theme park attractions and fortifying its fleet of cruise ships, operating profits actually soared 22% for the recently concluded fiscal 2012. With the New Fantasyland expansion in the Magic Kingdom set to officially open in a few weeks, investors are hoping that they will be the ones living happily ever after.

Other Things Worth Watching

• Zipcar (ZIP) is putting the pedal to the metal. The country's leading auto-sharing service continues to woo drivers that prefer hassle-free car rentals over the high costs of automobile ownership. Revenue climbed by a better than expected 15% in its latest quarter, and its user based expanded 18% to 767,000 members. Zipcar's profit of $0.10 a share sped past the $0.01 a share that the pros were targeting. Despite what may be a challenging fourth quarter given the company's strong northeastern presence, Zipcar is still raising its revenue, earnings, and adjusted EBITDA guidance for all of 2012.

• Priceline.com (PCLN) is learning to paddle. The "name your own price" travel portal turned heads on Thursday night by announcing a deal to acquire Kayak Software (KYAK). The $1.8 billion purchase will nab Priceline the popular website that sifts through various websites to offer the best fares and rates for hotels, flights, car rentals, and other travel services. Wonder where they'll go on their honeymoon?

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article, except for Disney and Zipcar. The Motley Fool owns shares of Zipcar. Motley Fool newsletter services have recommended buying shares of Zipcar, priceline.com, and Walt Disney.





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9 Comments

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towdamage

The profits shouldn't come as a surprise to anybody considering how much they have raised prices over the past two years. Everything from annual passes to park hoppers, merchandise to food, everything has been raised (in some cases %100). Combined that with special "up-charge" events like Mickey Halloween Party and eliminating the employee christmas party, it's no wonder profits are up. I understand it's a business, but Disney should keep in mind that eventually, they wil price the common family out of a trip.

November 10 2012 at 3:44 AM Report abuse rate up rate down Reply
hyperstan

we go to disney when we visit my uncle in orlando but they say you hafta be carefull when you go there with kids because lots of people there are gay. Thanks.

Stan.

November 10 2012 at 12:50 AM Report abuse -1 rate up rate down Reply
1 reply to hyperstan's comment
simon

whats being gay have to do with anything chill out man .....

November 10 2012 at 12:46 PM Report abuse rate up rate down Reply
vieragam

I live near Disney World. Even with residents' discounts the prices to go to Disney are Very Costly. It boggles many Floridians minds how the country is in such bad financial shape, yet folks all over the country have thousand of dollars for a week of Disney to fly or drive down, do the parks, stay in nice family hotels, eat all day and still they keep coming. Amazing!

November 09 2012 at 7:13 PM Report abuse rate up rate down Reply
tsmomfla

I live near Disney World. Even with residents' discounts the prices to go to Disney are Very Costly. It boggles many Floridians minds how the country is in such bad financial shape, yet folks all over the country have thousand of dollars for a week of Disney to fly or drive down, do the parks, stay in nice family hotels, eat all day and still they keep coming. Amazing!

November 09 2012 at 7:12 PM Report abuse rate up rate down Reply
Cindy

A Disney vacation can be expensive, depending on what hotel you stay in, how much you pay for your flight, how much you buy, where you eat.
At EPCOT, you can go to the French or Norwegian bakeries and buy not only pastry, but sandwiches as well as a drink.
You can just buy ice cream or snacks at the parks and eat off Disney property at fast food chains. Go to Disney during an off season and fly during the week.
You can stay off property. There are plenty of hotels located very close to Downtown Disney.
Do NOT buy a season pass unless you will come many times during the year.
Feed the children breakfast before you go into the park. Otherwise, you will be buying expensive meals.
Have a Magical Day!

November 09 2012 at 2:25 PM Report abuse rate up rate down Reply
1 reply to Cindy's comment
dusty754

Yes, a Disney vacation can be expensive, but the expense is worth every dollar given the fun and pleasure you get. You can ride an attraction several times and yet, still not see all there is to see on that attraction. Then there is the fun in trying to figure out how they do what they do or that the imagineers thought about something. For example, I was in the "stretching room" in Disneyland and something went wrong and they needed to reset. So the stretching room had to be brought back up. Wouldn't you know that the imagineers had added to the Ghost Hosts script, "Is this room actually shrinking?" I remember a character breakfast costing $74.00 for four people, but it isn't something you do everyday and the fun was worth the price.
I find that the best method is to go through a travel agency or one that uses Disney Travel and you get a decent deal on your vacation. My trips included a five day passport and two side trips. In
the five day passport was a magic morning where you got in the park two hours before it officially opened where you could ride certain attractions or have breakfast while characters wandered about the area. The side trips were whatever you wanted. A tour of Hollywood, trip to Six Flags, Sea World in San Diego, Knott's Berry Farm. A bus would pick you up at your hotel, bring you to a terminal where you would board your bus for your trip. Then when you returned that bus would take you to your hotel. In fact I never had to drive, Super Shuttle to airport, fly to LAX, super shuttle to hotel, hotels have shuttles to Disneyland, bus company had shuttles to the terminal for the side trips. Super shuttle to LAX, fly to PHX, super shuttle to home.

November 10 2012 at 1:04 AM Report abuse rate up rate down Reply
Janel

Flights are less expensive from Boston to Orlando than flying elsewhere for vacation. Disney offers great package deals (free dining plans at least once a year) and a bunch of price ranges on accommodations. If you use a credit card, with the Disney Credit Card from Chase, you can accumulated dollars to use toward the cost of your vacation when you are purchasing things you normally purchase anyways (gas, food, etc.). Disney also offers a lot of choices for everyone and focuses on quality service and accommodating various special needs. I'm not surprised their revenue has gone up. I did wonder about their profits, as they really are offering some great deals.

November 09 2012 at 1:31 PM Report abuse +1 rate up rate down Reply
katmogie

don't know how anybody can affordt go to dismey quit going when the one pas hit $75

November 09 2012 at 7:11 AM Report abuse rate up rate down Reply