Disney theme parks profits up 20%

Operating income at Walt Disney’s theme parks and resorts division rose 20% to $805 million in the last quarter.

Revenues for the quarter increased 9% to $3.9 billion as more people visited its US parks and spent more on tickets, merchandise, food and drinks.

This was partially offset by a decline at the entertainment giant’s international theme parks.

“Higher operating income at our domestic operations reflected both higher volumes and guest spending growth at our parks and resorts and, to a lesser extent, at our cruise business, partially offset by higher costs,” the company said.

“The volume increase at our cruise business reflected higher passenger cruise ship days due to the impact of the Disney Magic being in dry-dock for a portion of the prior-year quarter.

“Increased costs were driven by labour and other cost inflation, higher pension and post-retirement medical costs and increased depreciation driven by new attractions.

“The decrease at our international operations was driven by higher Shanghai Disney Resort pre-opening expenses, the impact of a weaker Japanese yen on Tokyo Disney Resort royalties and higher costs at Hong Kong Disneyland Resort, partially offset by an increase at Disneyland Paris.

“The increase at Disneyland Paris was due to higher guest spending, attendance and occupied room nights, partially offset by higher costs driven by higher volumes, new guest offerings and marketing costs. The increase in guest spending was driven by higher average ticket prices.”

Chief executive Bob Iger told CNBC that there had been no discernable impact on parks from a measles outbreak that health officials have said began at Disneyland in Anaheim, California, in December.

Disney now plans to open its Shanghai Disneyland theme park in spring 2016, Iger told analysts.

The company had earlier set a target of a late 2015 opening but decided to add attractions to the park, a $5.5 billion joint venture with China’s state-owned Shanghai Shendi Group.

The blockbuster animated film Frozen drove home entertainment and toy sales as overall net profits in the three months to December 27 rose 19% to $2.18 billion.

Disney will fuel the franchise with a seven-minute film that features a new song to be shown in cinemas ahead of its live action Cinderella film, due to be released on March 13.

“We actually believe it’s going to generate some more buzz for Frozen, and that should generate more buying in terms of consumer products,” Iger said.

“Our results once again reflect the strength of our brands and high quality content and demonstrate that our proven franchise strategy creates long-term value across all of our businesses.”

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