Foolish Talk...

The Motley Fool provides some perspective on all the negative talk about the Mouse...

Discuss.

Mr. Iger's Wild Ride...

With the economy in a downturn right now, the Walt Disney Company is having to deal with weakened demand for its products, from toys, cruises, movies and even theme parks...

This Yahoo article mentions several interesting points:


* Disney's shares slid 9 percent in extended trade but recovered a bit after executives announced plans to discount stays at Walt Disney World to stimulate bookings in the first half of 2009.

* A 13 percent decline in quarterly net income due in part to a bad debt charge. Revenue, however, topped Wall Street analysts' estimates.

* Net earnings of $760 million, down from net earnings of $877 million, in last year's fourth quarter.

Not all the news was bad...

* Revenue rose 6 percent to $9.45 billion from $8.93 billion a year earlier. Analysts, on average, expected revenue of $9.33 billion for the quarter, according to Reuters Estimates.

* Attendance at Disney's American theme parks is down only 1 percent so far in the current quarter and bookings for the first two quarters of fiscal 2009 are down "a little under 10 percent" from last year.

* Theme parks showed a 7 percent increase in revenue during the most recent quarter, helped by higher guest spending.

All in all, a mixed bag of things. Hopefully consumer confidence will bounce back by this time next year an we'll look back on this as a blip on the radar. Until then, we'll stay cautiously optimistic.

No pessimism to see here, move along. Move along...

Jobs Opening...

I know that Steve Jobs is one of several members on the Walt Disney Company's Board, that he's one of the most influential with Iger because of his relationship with Pixar and Lasseter, that him owning six percent of the company makes him the largest single owner of all, but...

Maybe he should be, I don't know, more. I mean, remember when the Mouse bought Pixar, everyone heard the rumors that he was going to mount a takeover like he did at Apple back in the late 90's. There were constant rumors going about that he was going to challenge Iger for the CEO slot. There were a few that he was going to take the position of Chairman of the Board and be the power behind the throne. It all turned out to not be so... except that he is "a" power behind the throne, just not the only one. When you're as successful as he is, with his ability to persuade, with the almost Disney-like fairy tale story of Apple's resurgence, you have to have some influence at the meetings they have. With his power over the music industry, his evangelizing of the iPod and changing the cultural typography of society with "must have" products like the iPhone are all magnetic powers that have people on the Board listening to his suggestions. But...

Shouldn't he be more? Like, maybe he SHOULD be Chairman? Or something else. I mean, have you seen the latest quarterly reports that came out today for his fruit company?

Wow.

Talk about a company that refuses to take part in the recession. Apple, Inc. alone has told the market and the world that: "Thanks, but no thanks" regarding this economic downturn. If only GM and Chrysler had handled their business like Apple then perhaps they wouldn't be talking about a merger right now.

For those of you with a giant question mark over your head saying: "What are you talking about, Honor?"

Well, just take a look at the financial results from earlier today:

- Apple's Q4 profit rose over 26 percent to $1.14 billion for the three-month period ended September 27th, 2008.

- Apple in America shipped 1,121,000 Macs and had $3.572B in revenues. That's are up 16 percent and 22 percent year-over-year, respectively.

- Apple in Europe shipped 611,000 Macs and had $1.723B in revenues. That's up 22 percent and 29 percent year-over-year.

- Apple in Japan shipped 78,000 Macs and had $320M in revenues. That's an increase of 8 and 25 percent year-over-year.

- Apple in the rest of Asia shipped 205,000 Mac shipments and had $562M in revenues. That's up by 32 percent and 27 percent compared to the same period a year ago.

- Apple's "Other Music Related Products and Services" segment earned the company $832M in revenue. A 38 percent increase year-over-year.

- Apple's "Peripherals and Other Hardware" brought in $428M in change... errr, I mean revenue. This was a 24 percent increase year-over-year.

- Apple's "Software, Service and Other Sales" accounted for $549M in revenue. This was a 28 percent increase over the same period in 2007 and a 10 percent over Q3 numbers.

- Apple sold more Macs than they've ever sold in a single quarter of its history.

- Macs actually accounted for less than half of Apple's total revenue with just 45.9 percent of total income.

- Apple sold 6,892,000 iPhones during Q4, earning $806M from these and related products; this is more than all previous quarters combined. They've already passed the 10 million mark that they planned for the entire year and have three more months to go. I'd call that purty successful, wouldn't you?

- Sales of the iPhone actually beat RIM's BlackBerry shipments last quarter; RIM shipped 6.1 million handsets compared to Apple's near 6.9 million. Apple, Inc. is now the third-largest mobile phone supplier in terms of revenue and it only became a phone maker a little more than a year ago.

- and Apple said that they sold more... do I really need to go on?

Actually, I could. There's quite a bit more news pertaining to iPods, Apple Stores and several other things but I think you get the point.

Perhaps we should just turn over the Mouse to Steve? I wonder what would happen if we did? I know that the Walt Disney Company is doing relatively well right now, the financials are pretty solid, but it makes you wonder what would happen if Steve Jobs had a tighter grasp on the reigns of power in Burbank.

With his attention to detail and his ability to make things that the world craves, could he make Disney's world be even more desirable?

Stay tuned...

Glory Daze...

I've said it before...

It's easy to be negative. For some reason it's easier for humanity to focus on doom and gloom. Even when it's not always the case. Although we're not in the "Goldielocks Economy" anymore, we're not in another Depression. When it comes to the Market, it's a lot easier to be a Bear than a Bull. Someone is always there to say something like: "Yeah, but..." Many people see the glass as continually half empty. I tend to see it an opportunity to open another bottle, but that's just me. A lot of people in the media are trying to say that Disney is going to cut back because of a world-wide slowdown. That there is no way to continue to live this Cinderella story. Is it really a fairy tale? Will the Mouse start to slash and burn it's movies, parks and other sources of revenue for the sake of the bottom line? So far, that's not the case.

Bob Iger did an interview with Jim Cramer on CNBC's Mad Money the other day that focuses on this point. Interesting article. Don't forget to watch the video interview as well...

In Bob We Trust...

Well, it appears the Mouse has beat the Street...

Wall Street that is. Reuters is reporting that the Walt Disney Company's profits outpaced what the analyst had predicted. Despite a downturn in the economy the Suits at the Mouse claimed to be optimistic.

The skinny:

Walt Disney Company shares rose 5.5 percent in after-hours trading based on the results. The stock's rise offset a 2.7 percent drop in regular trading.

The writers strike didn't appear to hurt the bottom-line of the Mouse.

Disney saw the benefits from a weak dollar, which has most Americans vacationing at home in Walt Disney World and Disneyland and more international tourist came to the American parks to take advantage of their currency's buying power.

A strong ad market increased sales far ahead of last year's levels despite lower TV ratings.

Net profit dropped to $1.25 billion from $1.7 billion in comparison to the same quarter last year(which is misleading because more revenue was generated last year by the sale of Disney's interests in Us Weekly and E! Entertainment).

Revenue rose 9 percent to $10.5 billion.

The Street was expecting a return of 52 cents a share but the company had earnings of 63 cents per share.

The consumer products division had a 29 percent revenue growth in the quarter.

Disney's movie studios, with releases like "Ratatouille","National Treasure: Book of Secrets" and "Enchanted" in this quarter, saw flat revenue and a 15 percent drop in operating income(again, misleading because of the comparisons to last years DVD sales of "Cars," "Pirates of the Caribbean: Dead Man's Chest" and "Little Mermaid").

Media networks operating profit rose 908 million or 28 percent, with ESPN, DVD sales of "High School Musical 2" and higher prime-time ad rates for the ABC network..

Profit at Disney's theme parks and resorts rose 25 percent to $505 million. The theme parks had a record holiday attendance and consumer spending at Walt Disney World in Florida was far higher than expected.

Disneyland Paris had high attendance.

Hong Kong Disneyland had improved attendance over last year.

International bookings are slightly ahead of this same time last year.

As a result of the strong earnings and cash flow, the Mouse plans more share buybacks and has already repurchased $1.5 billion of Disney stock this year.

Now after that, who wants to say Bob Iger isn't practically perfect?

(Just so there is no confusion... that last comment was a joke.)