Increased guest spending and attendance at the parks, and higher advertising rates and affiliate revenue at the media networks drove the earnings upside.
The revenue fell short of analyst expectations (Disney doesn’t provide guidance) – at $10.779 billion, compared to the $11.18 billion wall street was looking for.
Strong performance of Disney’s parks speaks to a stronger consumer. Overall, Iger’s bullish about the economic recovery. Iger says the trends are “encouraging” and that the company has successfully phased out discounts and returned to more normal pricing. More people are going to the parks—attendance at the domestic parks is up 3 percent—and they’re spending more – per capita spending is up 8 percent. And the outlook is upbeat going into the spring—reservations and rates are both pacing up by mid-single digits.
Disney’s cruise business is looking at a 40 percent increase in inventory as a new ship launches in a few months. So far the new ship is about 75 percent booked, which Iger says is a sign of strong consumer spending and confidence in the economy. But the Costa Concordiaaccident in Italy has taken its toll—Iger says that bookings decreased for the week.
Iger rarely gets worked up, but he seemed flat-out angry about the defeat of anti-piracy bills SOPA and PIPA. He told me that he’s frustrated by how the story has been co-opted as anti-piracy equating anti-free speech, saying “The battle should not be Hollywood against, the tech sector, we should be together battling those that are stealing our property and reselling it.”
Iger explained the flat advertising from ESPN as largely a function of the NBA strike. Though ABC benefitted from higher ad rates, lower ratings resulted in flat revenue. Iger says he’s optimistic the network will be able to boost ratings with some new shows in the works, which he says are “encouraging.”
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