Disney: Wall St. Misses The Theme Park Point

By Douglas A. McIntyre Published May 8, 6:30PM EDT

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Wall St. did not think much of Disney’s (DIS) earnings. The stock moved down over 2% to about $35.90 after the company announced its latest quarter. The company still trades near its 52-week high.

But, the news was better than it seemed. Investors were unhappy that revenue was flat $8.1 billion. Net income did rise 27% to $931 million. But, the immediately previous quarter had a much stronger net income gain.

The news reporting about earnings focused on the networks, both cable, mostly ESPN, and ABC. Revenue in the segment was flat, but operating income was up 21% to just under $1.2 billion. The studio segment, where the company has done heavy cost cutting, had a drop in revenue but net rose 60% to $235 million.

But, the portion of the business that has become the steady performer is the theme park segment. It may be overlooked, but it is the operation that differentiates Disney from it direct competiors: Time Warner (TWX), New Corp (NWS), Viacom (VIA), and CBS (CBS). They rely on media, studio, and internet business. Not one of them has a similar bricks-and-mortar arm.

Revenue at the theme parks rose 9% to $2.5 billion. Operating income was up 19% to $254 million, making it the second largest contributor after networks.

When old Walt Disney decided to build a theme park based on cartoon characters someone must have considered locking him up. But, it turned out better than most would have imagined.

Revenue from TV networks and studios can be fickle. But, the theme parks did well last quarter. They did well the quarter before.

And, no other media company has a similar business as an anchor.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.