Disney turnover up, but profits down

Disney turnover up, but profits down

The temporary closure of Tokyo Disneyland and costs at Disney Cruise Line contributed to a drop in quarterly profits for the Walt Disney Company.

The company's profit fell by 1% to $942 million (£575.5 million) in the three months to April 2 compared to the same period last year. Disney’s parks and resorts saw operating profits decline by 3% to $145 million based on improved revenue up 7% to $2.6 billion.

The decrease at Tokyo Disney Resort was caused by the March earthquake and tsunami in Japan which resulted in a temporary suspension of operations at the resort.

Lower operating income at Disney Cruise Line was primarily due to increased operating and promotional costs driven by the launch of new large ship Disney Dream in January and higher fuel and other operating costs for the existing fleet.

This was partially offset by higher passenger cruise days from Disney Dream, the company said. “Increased operating income at our domestic [US] parks and resorts was driven by higher guest spending and hotel occupancy, partially offset by increased costs.  

“Higher guest spending reflected increased average ticket prices and daily hotel room rates. Increased costs reflected labour cost inflation, higher pension and healthcare costs and expansion costs for Disney California Adventure at Disneyland Resort,” said Disney.   

Improved results at international parks and resorts reflected higher attendance and hotel occupancy at Disneyland Paris and Hong Kong Disneyland Resort and higher guest spend at Hong Kong Disneyland Resort, partially offset by labour cost inflation at Disneyland Paris.    

But Disney said: “Results at both our domestic and international parks and resorts reflected an unfavourable impact due to a shift in the timing of the Easter holiday relative to our fiscal periods.

“As a result, the current quarter did not include any of the two week Easter holiday while the prior-year quarter included one week of the Easter holiday.” 
Walt Disney Company president and chief executive Robert Iger said: “We are pleased with the underlying quality of our second quarter earnings. There is great creative momentum throughout the company which gives us continued confidence in our ability to grow our businesses.”


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