Walt Disney Company (The) (DIS)

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Walt Disney Co. (DIS)

F1Q10 (Qtr End 1/2/10) Earnings Call

February 9, 2010 04:30 a.m. ET


Lowell Singer - SVP of IR

Bob Iger - President and CEO

Jay Rasulo - SVP and CFO


Ben Swinburne - Morgan Stanley

Michael Nathanson - Alliance Bernstein

Spencer Wang - Credit Suisse

Imran Khan - JPMorgan

Doug Mitchelson - Deutsche Bank

Jessica Reif-Cohen - Banc of America Merrill Lynch

Jason Helfstein - Oppenheimer & Company

Anthony DiClemente - Barclays Capital

Michael Morris - UBS

Richard Greenfield - Pali Capital

David Miller - Caris & Company

John Janedis - Wells Fargo

Tony Wible - Janney Montgomery Scott



Good day ladies and gentlemen. Welcome to the Q1 2010 Walt Disney Earnings Conference Call. My name is Diana and I will be your operator for today. At this time all participants are in a listen only mode. Later we will conduct a question and answer session. (Operator Instructions). As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Lowell Singer, Senior Vice President of Investor Relations. Please proceed.

Lowell Singer

Hey, thanks and good afternoon everyone. Welcome to the Walt Disney Company's First Quarter 2010 Earnings Call. Our press release was issued a few minutes ago. It’s now available on our website at www.disney.com/investors. Today’s call is being webcast and that webcast will also be available on our website. Following the call we will post a transcript of today's call and a replay to our website.

Joining me in Burbank for today’s call are Bob Iger, Disney’s President and Chief Executive Officer and Jay Rasulo, Senior Executive Vice President and Chief Financial Officer. Bob is going to lead, followed by Jay and then we will of course be happy to take your questions. So with that, let me turn the call over to Bob and we'll get started.

Bob Iger

Thank you, Lowell and good afternoon. We're pleased with our first quarter performance which was better than last years due in part to improved advertising and affiliate revenue in our immediate networks and better attendance in our Parks and Resorts. At this point we have limited visibility regarding the economy and its impact on our businesses and thus we will continue to focus on controlling costs by creating great content and experiences and building our brands. We are also maintaining our focus on long term growth strategies in a world of rapid technological change and evolving consumer behavior.

Our movie studio under its new leadership is focused on proving its creative performance through high quality branded films Disney, Pixar and Marvel. The studio has also restructured its organization to produce, market and distribute movies more efficiently in light of the challenges the movie business is facing. This will help reduce costs and better position the studio with regard to the timing, pricing and distribution of its films.

Through our long term commitment for 3-D, we and others in the film industry have proved that a better experience can draw more people to the theatre and increase box office. We're excited about our upcoming live action slate including Alice in Wonderland, Prince of Persia, Sorcerer’s Apprentice and Iron Man 2, the first Marvel film to be released since we completed our acquisition. Tron, our December live action release is looking very promising and we're about to start production Pirates 4 which will be released in May of 2011.

On the animation side we're thrilled with Toy story 3 which is not only a terrific film from a creative perspective but represents the essence of our franchise strategy. With a great new story filled with beloved characters, this highly anticipated film has been embraced by the creative teams across Disney who will develop new merchandise, video games and experiences at our parks and resorts. The second installment of Cars, another strong franchise for the company will hit theaters in the summer of 2011.

And speaking of great Pixar animation, I would like to congratulate Pete Doctor and the team that created Up, which last week received five Oscar nominations including best picture and best animated picture. I also would like to congratulate the animation team at Disney behind The Princess and the Frog which also received the best animated picture nomination as well as two others. We wish them all our best for March 7th when the Academy Awards air on ABC.

Our media networks, we have been pleased with the success of our Wednesday Night ABC comedy block of the middle, modern family and Cougar Town and the strength shown by such returning dramas as Grey's Anatomy. Castle and particularly LOST which delivered terrific ratings in its final season premier last week.

We're also benefiting from the growing international strength of Disney Channel and the record ratings performance of ESPN. It's clear that ESPN's investment in programming and production values is delivering great results while their innovative use of new technology platforms is allowing them to serve fans in new ways to reach more people and to build their brand worldwide. At Parks and Resorts we've continued to invest in enhancing the guest experience as well as increasing our scope of attractions and destinations.

Over the last few weeks, we have started work on significant expansion projects at Hong Kong Disney Land and the Magic Kingdom at Disney World. Construction is also well underway at our Aulani Resort at Hawaii which will open late next year. This summer our expansion and improvement of California venture begins to roll out with a magnificent new experience world of color, while next January the Disney Dream, the first of our two new crew ships will set sail on its maiden voyage.

Read the rest of this transcript for free on seekingalpha.com