Disney still had a profitable quarter, but investors are likely to be nervous after disappointing results and continued uncertainty over the company's leadership.
After the Walt Disney Company missed earnings estimates Tuesday, chairman and CEO Robert Iger had reassuring words about the company’s blockbuster studio business and upcoming Shanghai theme park.
But Iger couldn’t offer any guarantees about who would be in his job 26 months from now, a question that has become more acute since his second-in-command, chief operating officer Thomas Staggs, announced his resignation last month.
“I don’t currently have any plans to extend beyond the June expiration date — that is June of 2018,” Iger told analysts in a call Tuesday. His role as CEO had previously been set to end in 2015, and then 2016 before the current 2018 date.
“I will remind people that I have just over two years left on my contract as CEO of the company and the board is very actively engaged in a succession process, as it has been actually for some time,” Iger said. “It believes it has ample time to identify a successor under timing circumstances that will be just fine for the company.”
In the more immediate future, Iger is preparing for the long-awaited opening of Shanghai Disneyland on June 16.
Trial openings started over the weekend, and Iger said feedback so far has been “absolutely phenomenal.”
“After 17 years of working on this project, I’m still awed by it: the scale, the detail, the sheer artistry,” he said. “It’s all breathtaking. I find something new to marvel over every time I visit and I know our guests will do the same.”
Still, Iger cautioned that it would “take some time” for the park to contribute to the company’s profits because of startup costs.
“We’re walking before we run there,” he said. “Eventually, we have a very, very optimistic outlook about the park that we’re opening there and about the market in general.”
For the second fiscal quarter, which ended April 2, Disney reported overall revenues of $12.9 billion and profits of $2.1 billion, or $1.30 per share. Those figures were increases from the previous year but fell short of expectations.
Parks and resorts revenue increased 4 percent to $3.9 billion.
International parks did not perform well for the company during the quarter, but guests spent more domestically on theme park tickets, food, drinks, merchandise, hotel rooms and Disney Cruise Line fares.
At the U.S. theme parks, the company introduced dynamic pricing during the quarter — charging different prices for different days — and said that had been effective.
The company said attendance during the quarter at Disneyland Resort in California increased, but the Walt Disney World Resort in Florida saw “a modest decrease.”
“We like the steps that we’ve taken in terms of pricing,” Iger said. “We’ve made a number of steps to essentially grow revenue, in some cases actually at the expense of some attendance where we’re changing our pricing approach sometimes in part to moderate attendance so the park experience is a little bit better.”
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Tags: disney, earnings, theme parks
Photo credit: A statue of Walt Disney and Mickey Mouse at the Magic Kingdom in Florida. Travis Wise / Flickr