Mouse EARnings...

The Mouse seems to be doing quite well on Wall Street...

Yesterday, the Walt Disney Company released its second quarter earnings report to investors and the world.
And they beat expectations:

- Earnings were up 36 percent over the previous year.

- Net income went up 32 percent from a year ago.

- Media Networks had a 6 percent turnover.

- Studio Entertainment was up 13 percent.

- Parks and Resorts rose 14 percent.

- Consumer Products increased 12 percent ahead of 2012.

- Interactive (the Achille's heel of the Mouse) even was up 8 percent (Now if they'd only change their gaming strategy and buy a big name company.).

All in all, the investors are really happy with the direction of the company.  Critics may not agree with Iger's decision to acquisition his talent, but it's effect on the bottom line is boosting prospects for the company.  While parts of the entertainment giant have languished over periods of the past decade, the idea of bringing in successful talent to shore up the lack of creativity has/will produce results that put smiles on investor's faces.

It's a much more solidified/lean/dominating behemoth that Bob Iger plans on leaving his successor...

Adoption Complete...

The story of a boy, a girl, and a whole galaxy waiting for a mouse... 

Well, the Mouse officially has a new addition to the family...

The Walt Disney Company completed the purchase of Lucasfilm today.  With the closing of the bell on Wall Street, George Lucas' famous company now becomes another sibling in the colossus that is Disney.  Here is the official press release:

BURBANK, Calif., December 21, 2012 – Continuing its strategy of delivering exceptional creative content to audiences around the world, Robert A. Iger, President and Chief Executive Officer of The Walt Disney Company (NYSE:DIS) announced today that Disney has completed its acquisition of Lucasfilm Ltd. LLC.

“We’re thrilled to welcome Lucasfilm to the Disney family,” said Iger. “Star Wars is one of the greatest family entertainment franchises of all time and this transaction combines that world class content with Disney’s unique and unparalleled creativity across multiple platforms, businesses, and markets, which we believe will generate growth as well as significant long-term value.”

Under the terms of the merger agreement, at closing Disney issued 37,076,679 shares and made a cash payment of $2,208,199,950. Based upon the closing price of Disney shares on December 21, 2012 at $50.00, the transaction has a total value of approximately $4.06 billion.

Lucasfilm’s assets include its massively popular Star Wars franchise, operating businesses in live action film production, consumer products, animation, visual effects, and audio post production, as well as a substantial portfolio of cutting-edge entertainment technologies. It operates under the names Lucasfilm Ltd. LLC, LucasArts, Industrial Light & Magic, and Skywalker Sound.

Strange that they don't mention "Indiana Jones" in that.  I know that "Star Wars" is the primary motivation for the purchase, but the famed archaeological professor ain't no wall flower.  He can hold his own.  Not to mention all the other properties Disney has access to (American Graffiti, etc.).

But what fans have wanted for years has come to pass.  George no longer has control over his creation.  Now, the future of Star Wars is in the hands of someone else, for another generation.

And the ones after that...

Mou$e Bu$ine$$...

As Walt Street markets closed today the Mouse revealed its quarterly earnings...

And the company's earnings were down. Partly because of the tragedy in Japan, but also because of some man made disasters as well. Here are a list of some of the highlights:

- The Walt Disney Company had a net income of $942 million for the quarter (off 1% from 2010, ago).

- Company revenue rose by 6% to $9.1 billion, from $8.6 billion in the comparable quarter (strange how it can be off by last year and still have more cash, eh?).

- The Walt Disney Studios made $77 million for the quarter which ended on April 2 (a 65% drop from the same quarter of 2010, which had blockbusters like "Alice in Wonderland"). The bad news was mainly from "Mars Needs Moms" which subtracted $70 million from the studios bottom line. The other was "Prom" which was a huge stinking pile of, well let's just say it was a High School Musical wanna-be. Mars was one of Dick Cook's projects, but Prom was Ross' first green lit film which was an example of the bad of the old regime and the bad of the new regime. Let's pray the rest of his selections don't go like this or 2013/14 will see him going the way of Cook.

- The bright spot as it has been for several quarters is in the broadcast/cable properties of the Mouse, particularly ESPN. Income increased 17% to $1.5 billion from an rise in advertising revenue at ESPN, additional subscribers/fees for Disney Channels Worldwide and ad buys for ABC and the Disney owned television stations.

- As stated before, the earthquake/tsunami in Tokyo resulted in lower earning for the Disney Parks division now run by Tom Staggs. A 3% drop in income meant that the division made $145 million. This profit includes all 11 parks, the 9 Disney owns and the 2 that are licensed to the Oriental Land Company.

A profitable, but mixed bag for investors as the loss didn't result in going into the red, but still provided less than desirable earnings for stockholders.

Of course Summer/Soundsational is just around the corner and good things lie ahead...

Big Apple...

Wow, a decade ago I would have never imagined this...

If you haven't heard, Apple, Inc. today passed Micro$oft to become the number two company in the world (behind Exxon Mobile). And the number one technology company in the world. I wonder if Bill Gates thought that this moment would happen when he agreed to invest a little cash into Steve Jobs' Little Fruit Company to build investor/customer confidence? Could we mark this day as a passing of the guard?

Time will tell...

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...

The Wonderful World Of Disney Shareholders...

The Walt Disney Company released the results of its second fiscal quarter today...

What did it say about the Mouse? With fears of the economy in a downturn, some analyst feared the results would be dour or weakened.

Recession, schmession...

Iger and Co. stunned Wall Street with impressive quarter growth that was well beyond what was expected. Among the highlights:

The Walt Disney Company's net income was up 22 percent on revenue which rose 10 percent to a hefty $8.7 billion.

$1.1 billion in net income for the quarter.

11 percent rise in revenue from last year to this year for the parks and resorts division with $2.7 billion.

Operating income for the division increased 33 percent to $339 million.

Iger stated that the parks have been "resilient to date." despite the economic problems.

Disney saw increased attendance at Walt Disney World Resort, increased guest spending and increased revenue at the Disney Vacation Club rooms on the resort.

Disneyland Resort Paris has been experiencing an increase in attendance, boding well for expansion in that park over the next few years(my emphasis, not theirs).

More consumers staying at Disney properties when visiting the theme parks as opposed to cheaper off-site lodgings.

Domestic hotel bookings are ahead for the second half of the year compared with the second half of last year.

Walt Disney Studios operating income was up 61 percent to $377 million on revenue that rose 18 percent to $1.8 billion.

Home entertainment was big as well with DVDs of "Enchanted", "The Game Plan" and "No Country for Old Men" doing very well.

Media networks operating income improve 14 percent to $1.3 billion on revenue that was up 5 percent to $3.6 billion..

Consumer products had 10 percent revenue growth to $551 million, while operating income that dropped 14 percent to $107 million.


Not bad... And we're now in a quarter that has "Narnia" and "Wall-E" coming up as well as the new Toy Story rides at DCA and DHS to help propel profits for this quarter. I wonder how many skeptics there are of the Pixar deal still around? I'm sure they're hiding in the shadows waiting for "Bolt" to come out this November and crossing their fingers hoping that it bombs.

Don't hold your breath...

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.)

Are You A Pooh Or An Eeyore?

Blue Sky got a lot of comments and e-mails about our "Success Of Failure" posts. It seemed to strike a nerve with many people. That got me thinking about the way Disney fans perceive the company and how it resembled the way Wall Street's perception of the stock market is. You know how investors deal with ups and downs?

The Bulls and the Bears.

While the Bulls tend to take an optimistic view, Bears tend to take a pessimistic view. So an analogy to this regarding Disney, using Disney characters, would be in order. Although in this case, it's my belief that the best character to use for Disney's version of a bull would be a... bear.

A bear?

A Pooh Bear, actually. Winnie the Pooh represents the bullish view on Disney because of his positive view toward everything. His perspective of the world and how he approaches it are all from a belief in all that is good. He never says an unkind word and always stays positive.

Now for the negative view of things, the ones who are always down on the company or wishing for Uncle Lasseter to fail... it's an obvious choice.

A jack ass.

Hehe... sorry, but I thought that was funny. A donkey, actually. Eeyore to be exact. While the little stuffed animal is a sweet character he is also completely the opposite of Pooh. Always negative. Always looking at everything from the perspective of what could go wrong and how nothing ever goes right. Couldn't you just see some of the comments made about "Ratatouille" being said by him?

So there you have it. Wall Street has the Bulls and the Bears and we Disney fans have the Poohs and the Eeyores.

So the question I have...

Which are you?

The Happiest Place On Earth To Wall Street...

The Walt Disney Company released its earnings for the quarter. As expected, they were good. Very good. A 4.7 percent increase from the previous year. Per share earning were up slightly more than what Wall Street expected. Revenue all around was up from cable-network to sales and the after-hours trading showed as much with the stock trading up about 3 percent.

Fool Sweet On Mouse...

The Walt Disney Company's quarterly report is due out after the market closes today and the Just like some of the Suits when it comes to creativity. But that's another story all together. Motley Fool is out with a general perspective of the company. The brief report paints a pretty rosy picture for the House of Mouse in regards to the current business cycle.

We'll find out later today how Bob Iger's strategy is working. My only complaint from what I read is the comment about is that the "Year of a Million Dreams" promotion is "pulling in boatloads of customers through Disney's park turnstiles the world over"... well yeah, the attendance is great but I don't think it's because of this promotion. Most people that visit the park have no idea about the promotion. The truth is... times are good. Disney is a great place to go to enjoy yourself and shed some weight from your wallet. The Dreams campaign is getting credit for something it didn't do...

The Goldielocks Economy...

Being positive has many reactions...

Some people on the web tend to believe you're a Lemming. That you go through life with a bias refusing to look at something from a clear perspective. I've had quite a few e-mails accuse me of this. That I'm a shill for the Disney company talking only about the good news, never addressing the underlying problems the Mouse has.

But what I've learned in life is...

Being positive is hard. Being negative is easy. It all depends on the perspective you view it from. Sometimes it's difficult to be positive... but I believe it helps when you go through life to try and find a reason to believe. It certainly helps you get through the hard times and really enjoy the good times.

Now for a confession.

I will admit I am a huge Disney fan... if you read this blog I don't think that will come as a surprise to you. I am not though, a Lemming. I do not intend to give people false hope when talking about the coming attractions that the Mouse House has in store for us. I will fully admit that Blue Sky Disney would have a lot harder time filling a weeks worth of news with a positive spin if it had been started three or four years ago. Let's face it... right now the Walt Disney Company is having a banner year. A couple even... and to be truthful, Michael Eisner would be having a banner year were he in charge. Though were that the case, we wouldn't be getting as many fun gifts.

But I will say that it's not just the Disney company that's having a grand time. The global markets are booming and it has an effect on practically everything, including Bob Iger's company.

What this economy is known as is "The Goldielocks Economy". This is an economy that is running on all cylinders, full steam ahead but not too hot and not too cold. Hence the name... We're going through a very profitable time for America and the world. The Dow Jones hit a record 14,000 yesterday and had a minor correction today. The Nasdaq is at a six year high. We've had 41 records on Wall Street since January 1st of this year. This economy is doing very, very well. This is having the affect of creating a great amount of profits that corporations are sitting on. Now the Street doesn't like to see that money just setting around. It wants it to be invested in something substantial... that's why we see Bob Iger so willing to spend money to expand the resorts... he can't just let it sit there and do nothing. If he does the analyst will punish him by reducing the stock price and therefore the value of the company would go down.

We are living in grand times... this is a moment when the economy has combined with focused leadership to very promising results. There is such a thing as having good management and prosperous times colliding to give us what could turn out to be the true "Disney Decade". Let's hope that the economy keeps on chugging along. If we don't have another terrorist attack like 911 or a unforeseen downturn in a foreign market then we could see an incredible spurt of growth, creatively and economically for the Walt Disney Company. This doesn't mean there's nothing wrong with the economy... but no economy has everything run perfect. There will still be companies that go bankrupt and people that get too greedy. But for a Disney Geek, the view almost looks like you're living in Fantasyland.