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54 Percent Gains in Profit for Disney in the First Quarter


Tuesday, February 8th, 2011
News

The New York Times reported that after nine consecutive quarters of losses, Disney has finally posted positive growth. The dramatic shift in the company's figures show that the company profited $1.3 billion off of a total revenue of $10.7 billion. According to the Wall Street Journal, this has driven stock prices up by 3.6 percent to $42.67 in after-hour trading. According to the data, this means that Disney is poised to surpass its all-time high of $43.29.

The initial response of Disney to the recession was to implement discounts. With the recent economic data posting 25% increases to $468 million on the general growth of the internal income operating unit, the company was able to time it’s restoration of ticket prices to their original levels. According to the aforementioned New York Times article, other barometers of the company’s overall health show attendance has increased by 2 percent, and room rentals were up 4 percent. Notably, the trend was not limited only to. US parks and was mirrored in the international franchises as well such as Euro Disney

Commentary cited in the Wall Street Journal from Disney’s Chief Financial Officer, Jay Rasulo, suggests that the impressive performance of Disney this quarter is the result of the consolidation of distribution mechanisms for theaters, DVD, digital platforms, and television. According to the Los Angeles Times, credits these measures for driving down home entertainment marketing and distribution costs. The only section of Disney to operate at a loss this quarter was Disney’s interactive media unit posting a margin that’s grown to nearly 30% or $13 million. The Associated Press cites ESPN and ABC for increasing ad revenue.

The broader outlook for the company in the second quarter shows strong signs of increasing its rally. However, even Disney Chief Executive took a measured stance on the gains stating that customers continue to engage in activities like bargain hunting, making it difficult for the company to project when the company will completely recover.



Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: 54 , ad rates , amusement parks , disney , entertainment , profits