Yesterday The Walt Disney Company released their third quarter earnings for the fiscal year 2017 and the full FY2017 Q3 results can be downloaded here.
The opening statement and the section concerning the Parks and Resorts division which will be of interest to Disneyland Paris fans and ex-Euro Disney S.C.A. shareholders are reproduced below.
The total revenue of the Parks and Resorts division was $13,748 million in the nine months ending 1 July 2017, a 9% increase upon last year, and the divisions operating income was $3,028 million an increase of 17% on least year.
TWDC are reporting operating income growth at Disneyland Paris with higher guest spending and attendance, partially offset by higher costs for new guest offerings (shows and parades), including the 25th Anniversary celebration. The increase in guest spending is primarily due to higher average ticket prices and increases in food, beverage and merchandise spending.
TWDC also reported a 6% decrease in net income, dropping to $108 million which was attributable to noncontrolling interests for the quarter driven by the impact of lower net income at ESPN, partially offset by the impact of improvements at Shanghai Disney Resort and Disneyland Paris. The Net income attributable to noncontrolling interests is determined on income after royalties and management fees, financing costs and income taxes.
Anniversary years at Disneyland Paris normally see an increase in visitors which then fall off, a similar spike happened during the 20th Anniversary celebrations which were extended to take advantage of the increase in visitor numbers.
Whether Disneyland Paris can continue to attract higher visitor numbers once the 25th Anniversary celebrations have ended next year will have to be seen.
Next year will see two major attractions at the resort The Phantom Manor and Big Thunder Mountain go into rehabilitation at the same time, which will seriously effect Frontierland, and will see increasing waiting times at the parks other E-ticket rides.
Will Guests avoid visiting the park during this period, I guess we will just have to wait and see. Hopefully Disneyland Paris can continue the increase in visitor numbers into next year.
THE WALT DISNEY COMPANY REPORTS
THIRD QUARTER AND NINE MONTHS EARNINGS FOR FISCAL 2017
BURBANK, Calif. – The Walt Disney Company today reported quarterly earnings for its third fiscal quarter ended July 1, 2017. Diluted earnings per share (EPS) for the quarter decreased 5% to $1.51 from $1.59 in the prior-year quarter. Excluding certain items affecting comparability(1), EPS for the quarter decreased 2% to $1.58 from $1.62 in the prior-year quarter. Diluted EPS for the nine months ended July 1, 2017 decreased to $4.55 from $4.63. Excluding certain items affecting comparability(1), EPS for the nine months increased to $4.63 from $4.61.
“Today we announced a strategic shift in the way we distribute our content. The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the Company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.”
“Our results for the quarter reflect the underlying strength of our brands and franchises, and our continued investment in high-quality content. Our ability to successfully execute on our core strategy, coupled with our plans for new direct-to-consumer offerings, give us continued confidence in our ability to drive shareholder value,” said Christine M. McCarthy, Senior Executive Vice President and Chief Financial Officer, The Walt Disney Company.
Parks and Resorts
Parks and Resorts revenues for the quarter increased 12% to $4.9 billion and segment operating income increased 18% to $1,168 million. Operating income growth for the quarter reflected an increase at our international operations, while results at our domestic operations were comparable to the prior-year quarter. Segment results benefited from the timing of the Easter holiday, which fell in the third quarter of the current year compared to the second quarter of the prior year.
Operating income growth at our international operations was due to increases at Shanghai Disney Resort and Disneyland Paris. The increase at Shanghai Disney Resort reflected a full quarter of operations in the current year compared to the prior-year quarter, which included pre-opening costs. Higher operating income at Disneyland Paris was due to increases in guest spending and attendance, partially offset by higher costs for new guest offerings, including the 25th Anniversary celebration. The increase in guest spending was primarily due to higher average ticket prices and increases in food, beverage and merchandise spending.
At our domestic operations increased costs were essentially offset by increases in guest spending and volumes. Higher costs were primarily due to labor and other cost inflation, increased operations support costs, new guest offerings and the dry-dock of the Disney Fantasy in the current quarter. Costs for new guest offerings were driven by the launch of the expansion of Disney’s Animal Kingdom at Walt Disney World Resort, including the related marketing costs. Guest spending growth was due to increases in average ticket prices for sailings on our cruise ships and admission to our theme parks, as well as higher average daily hotel room rates and food and beverage spending. Higher volumes were due to attendance growth, partially offset by a decrease in occupied room nights and lower passenger cruise days due to the dry-dock of the Disney Fantasy. The decrease in occupied room nights was due to refurbishments and conversions to vacation club units