Disney Narrows Loss in Hong Kong

Bilibala: Disney park in France are still in loss position, to me, it is challenging for HKG Disney to break even. However, with all other Disney products & services such as Studio & consumer products, I think porfit or loss is not a concern, at least not for Disney's shareholders.
On the other hand, for HKG government, haha, they should know what they investing before invested. They are not investing in Disney stock which will go up, but invested in Disney Park, which may take years to reduce to a lower losses. How much Disney can indirectly benefit HKG's tourism & economy? I don't think that's a lot if you replace it with another park similar to Ocean Park.

http://www.businessweek.com/news/2011-01-18/disney-narrows-loss-in-hong-kong-expects-profit-fairly-soon-.html

Jan. 18 (Bloomberg) -- Walt Disney Co. narrowed the annual loss at Hong Kong Disneyland and said it expects the business to turn profitable “fairly soon” as visitor numbers rise and the park expands.

The net loss shrank to HK$720 million ($93 million) in the 12 months ended Oct. 2 from a HK$1.3 billion loss a year earlier, according to a statement distributed in Hong Kong today. Park attendance increased 13 percent to 5.2 million visitors, boosting sales 19 percent to HK$3 billion.
The theme park benefited from a 27 percent surge in arrivals from mainland China in Hong Kong last year as wealth generated in the world’s fastest-growing major economy spurred outbound tourism. New areas of the park scheduled to be completed in 2014 may lure more visitors.
“We hope they can accelerate the expansion and add more rides,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council.

The park, a venture between Hong Kong’s government and the Burbank, California-based company, plans to add rides including “Toy Story Land,” “Grizzly Trail” and “Mystic Point” after the city approved the conversion of part of its loan to the park into equity in 2009 and Disney agreed to pay HK$3.5 billion.

“The expansion is very crucial to our profits in the future,” Hong Kong Disneyland managing director Andrew Kam told reporters today.

China Visitors
Hong Kong’s government owns about 53 percent of the theme park. Disney, the world’s largest media company, owns the rest.

The expansion plan is on time and on budget as the park signed most of the outsourcing contacts in 2009 that allow it to avoid a rise in raw-material costs, Kam said. “Toy Story Land” will be completed this year, he said.

The share of Hong Kong Disneyland visitors coming from mainland China rose to 42 percent from 36 percent, while Hong Kong’s contribution declined to 33 percent from 41 percent.
The park had earnings before interest, taxes, depreciation and amortization of HK$221 million. Hotel occupancy increased 12 percentage points to 82 percent.

Ticketing generates the most profit, Kam said, followed by merchandising, food and beverage and hotel businesses.

Total visitor arrivals to the former British colony surged 22 percent to 36 million in 2010, according to the government- backed Hong Kong Tourism Board. China’s National Tourism Administration said outbound tourism increased 17.5 percent last year to 56 million people, Xinhua News Agency reported Jan. 12.

Hong Kong Disneyland expects attendance to grow 10 percent in 2011, in line with a forecast from the city’s Tourism Board, Kam said.

--With assistance from Marco Lui in Hong Kong. Editors: Suresh Seshadri, Terje Langeland

Top holding in USA 12/02/10

USA
1. Google Inc. (GOOG) US$745.1 BUY
2. Wells Fargo Financial (WFC) US$41.1 STRONG BUY
3. General Electric (GE) US$19.7 BUY
4. American Express (AXP) US$48.6 HOLD
5. Walt’s Disney (DIS) US$36.99 HOLD

• Google’s price fall $30 this week because Europe is investigating whether its searching engine has anti-trust issue. Currently, with 80% market share in Europe, Google for sure dominant the online search market. It is fine if it is because of customers loyalty, it will be charged if it is because Google give favor to sponsor link and set barriers to other website / competitors. In the past, Microsoft had lawsuit with the Europe Commission for years and end up settled the $2.0B fine. Intel also being charged $1.4B in 2009 by EU. To me, those lawsuit can be settled by fine while Google’s dominate position will not change.
• Did anyone of u watch Disney’s Tangled? It is a fun to watch movie, the characters are more human (instead of black & white) with great music & storyline.
• November interest rate move up, I think is time to invest more on insurance company and reduce investment on government & corporate bonds

Top holding in USA 11/16/10

1. Google Inc. (GOOG)
2. Wells Fargo Financial (WFC)
3. General Electric (GE)
4. American Express (AXP)
5. Walt’s Disney (DIS)

Walt’s Disney: after I sold Exxon Mobil, Walt’s Disney became Bilibala’s 5th top holding in USA. It reports 4q results according to Bilibala’s expectation (little lower than wall street). Its2010 EPS up 13.4% to $2.54m thx to the significant improve in Studio Entertainment segment (Toy Story 3, Iron Man 2, Alice in Wonderland helps Disney to make lots of $$). On the other hand, that also put a open question: can this strong box office continue in future years? Advertisement in Disney Channel, ABC and ESPN will continue to improve as economy slow growing.

Ahead of the Bell: 'Alice' success good for Disney

Bilibala: Disney is in a nice pace during the economy recovery. To me, the postor of "Alice in Wonderland" doesn't look cute, but I will definitly go and watch "The Ocean" and "Toy Story 3".

http://www.forbes.com/feeds/ap/2010/03/08/business-mobile-telecommunications-us-disney-ahead-of-the-bell_7414936.html

NEW YORK -- Analysts see "Alice in Wonderland" as a much-needed hit for The Walt Disney Co., but note the returns from one movie aren't enough to move the needle on its financial results.
The adventure through the looking glass earned a blowout $116.3 million in its opening weekend - a record for a 3-D film and for a non-sequel.

Analyst Doug Mitchelson at Deutsche Bank ( DB - news - people ) said his tentative estimate was that Disney ( DIS - news - people ) could ultimately make $200 million from the movie. More importantly, he sees the movie as kicking off a recovery in content for Disney, "which has been in an 18-month dry spell with duds like Bedtime Stories, G-Force and A Christmas Carol."

This summer, Disney will debut "Toy Story 3" and "Iron Man 2," followed by the second "Cars" movie and the fourth installment of "Pirates of the Caribbean" next summer. A recovery in content can drive success for the whole company, he writes.

Tony Wible at Janney Capital Markets also noted that the success of "Alice" was a "much needed boost" for Disney, but said it wouldn't change his earnings estimates, which already factored in some returns from the movie.

He highlighted another weekend drama as more significant for Disney's prospects. New York-area cable company Cablevision Systems Corp. ( CVC - news - people ) reached a deal with the local Disney-owned ABC affiliate for retransmission, giving cable subscribers the signal back 14 minutes into the Academy Awards broadcast.

Morgan Stanley Raises Estimates, Price Target For Disney

Bilibala's fair value on Disney is US$34.0. I think Disney is a great & un-replacable (at least hard to) company in Entertainment and Media sector, but slow economy recovery will slow Disney's growth in the coming few years. That's why my fair value calculation is more conservative compare to Morgan Stanley.

http://www.mysmartrend.com/nw/19058

By Chip Brian, SmarTrend Analytics Team

2/23/2010- Morgan Stanley analysts are raising their estimates and price target for Walt Disney Co. (NYSE:DIS) following Q1 results and Q2 advertising trends that highlighted advertising strength at ESPN and the ABC stations.

Analysts Benjamin Swinburne and Kristi Bonner said, "Relative to our OW thesis, the 1Q results and 2Q advertising trends highlighted advertising strength at ESPN and the ABC stations. In addition, stronger-than-expected affiliate revenue growth from ESPNU also helped the cable networks segment, which saw 20%+ consolidated 1Q10 EBIT growth. Two other legs to our thesis - a consumer/theme park recovery and a creative cycle at the film studio - remain ahead of the stock. However, both segments saw stronger-than-expected cost management, as margins were ahead for 1Q10. We are raising our 2010 and 2011 estimates to $1.98 and $2.35, respectively. Our new 2010 estimates reflect a faster recovery in broadcast advertising vs. our prior model at both the ABC network and the local TV stations."

The bank has a $37 price target on the stock.

Disney 1Q EPS down

Bilibala: it is possible Disney's EPS will go down cuz advertising contact was signed in 2009 when the economy is under recession. To me, I think the EPS will be the same as last year.

LOS ANGELES (AP) - Family entertainment giant The Walt Disney Co., which just absorbed Marvel Entertainment Inc., reports earnings for its fiscal first quarter after the market closes Tuesday.

WHAT TO WATCH FOR: The advertising recovery will likely help Disney's ABC and ESPN television networks, but the question is by how much.

Disney's movie studio, which has been faltering lately, will likely cause a drag on earnings. The company overhauled management at the department in October and recently closed offices at niche label Miramax Films, which some competitors are interested in buying.

Consumer sentiment should be reflected in the performance of the company's theme parks. It is unclear how soon Disney will be able to wean itself off discounting to keep attendance up.

Also, Disney executives may discuss the possibility of entering into a deal to provide movies and TV shows to Apple Inc.'s iPad, which may help studio earnings down the road. Apple CEO Steve Jobs remains Disney's largest shareholder since the entertainment company bought Pixar in 2006.

WHY IT MATTERS: Disney is closely tethered to consumer psychology because the brand is well known around the world. It sells products ranging from movies and books to clothes and toys. A good quarter could bolster confidence in the broader economy.

WHAT'S EXPECTED: Analysts surveyed by Thomson Reuters expect Disney to post 39 cents of adjusted earnings per share on sales of $9.62 billion.

LAST YEAR'S QUARTER: Disney reported an adjusted profit of 41 cents per share on revenue of $9.60 billion.

Disney to buy Marvel

BBC news http://news.bbc.co.uk/2/hi/business/8230504.stm
Page last updated at 13:50 GMT, Monday, 31 August 2009 14:50 UK

Entertainment giant Walt Disney is to buy Marvel Entertainment in a shares and cash deal valued at $4bn (£2.5bn).

The deal means Disney will take over ownership of 5,000 Marvel characters, such as Spider-Man and the X-Men.

Marvel shareholders will get $30 per share in cash plus 0.745 Disney shares for every Marvel share owned.

The boards of Disney and Marvel have both approved the deal, which now needs the backing of Marvel shareholders and competition authorities.
Marvel shares were ahead $10.17, or 26%, to $48.82 shortly after the market opened. Disney shares fell 47 cents, or 1.8%, to $26.37.

'Great assets'
"We believe that adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation," Disney president and chief executive Robert Iger said.

"We are pleased to bring this talent and these great assets to Disney."

Other Marvel's characters include Captain America, the Fantastic Four and Thor.

"Disney is the perfect home for Marvel's fantastic library of characters given its proven ability to expand content creation and licensing businesses," said Marvel chief executive Ike Perlmutter.

"This is an unparalleled opportunity for Marvel to build upon its vibrant brand and character properties by accessing Disney's tremendous global organization and infrastructure around the world," he added.

'Good deal'
Arvind Bhatia, an analyst at Sterne, Agee and Leach, said that the deal appeared to be a "win-win situation for both companies".

"They [Marvel shareholders] are getting a good deal in my opinion. The CEO of the company, Isaac Perlmutter, is also the largest shareholder of the company.

"From that standpoint, we think the chances of this deal going through are pretty high."
Last month, Walt Disney reported a fall in profits of more than a quarter as the downturn hit revenue at its film and theme park divisions.

Net profit between April and June came in at $954m (£579m), down 26% on the $1.28bn the entertainment giant made in the same period last year.

Revenues of $8.6bn were down 7% from the $9.2bn recorded a year before.

Bilibala comments:
Despite there are million fans with Spider man and Mickey Mouse, Disney is facing challenge from the trend to switch from tradtional media to online => 1) free online movie channel 2) Youtube 3) illegal DVD movie market.

The Disney journey in future will not be easy.