Disney Beats The Odds


The Setup: Heading into The Walt Disney Co.’s fiscal second quarter conference call last Tuesday, all eyes were on the media and entertainment giant’s Parks and Resorts segment, which some feared would be hit hard by the declining U.S economy.

It was feared that even with the usual strong growth at its other operating segments — such as Media Networks and Filmed Entertainment — a bad quarter from its theme parks could drag down the company’s overall quarterly growth and break the string of seven consecutive quarters of double-digit operating income growth.

The Reality: Coupled with an early Easter holiday and aggressive pricing policies, theme parks, including the Walt Disney World resort, Disneyland and Disneyland Resort Paris, reported revenue of $2.7 billion (an 11% increase) and operating income was up 33% to $339 million.

Disney CEO Bob Iger said the company’s continued investment in its parks and resorts and strategic pricing initiatives that allow families to spend more time at Disney hotels for less money “make us more resilient to economic downturns.”

The weak dollar actually helped boost Disney reports on two fronts: It attracted more international visitors anxious to take advantage of more favorable exchange rates and kept U.S. residents closer to home.