A good time to buy? Mariott Internatinal, Inc
Download 189.26 Kb.
|
- Navigate this page:
- Analysis
Business SummaryIn fiscal year 2001, The Walt Disney Company’s businesses included Parks and Resorts, Media Networks, Studio Entertainment, and Consumer Products. Revenues for The Walt Disney Company as a whole fell from $25.35 billion to $25.25 billion, with Segment operating income decreasing from $4.12 billion to $4.04 billion. Cash flow from operations fell from $3.76 billion to $3.05 billion, while borrowings increased from $9.46 billion to $9.77 billion. The Chairman of the Board in the most recent 10-k explains the reasons for the changes: “The profitability of the leisure-time industry is influenced by various factors that are not directly controllable, such as economic conditions including business cycle and exchange rate fluctuations, travel industry trends, amount of available leisure time, oil and transportation prices and weather patterns. During fiscal 2001, the Company’s theme park and resort operations were also adversely affected by significant reductions in domestic and international travel in response to the September 11th terrorist attacks and their aftermath.”29 The company explained additional impacts following the terrorist attacks in the most recent 10-k as follows: “2001 Compared to 2000 The Company expects that the events of September 11th and their aftermath coupled with the already soft economy will continue to influence its operating results into fiscal 2002. This impact is likely to be most significant in certain of the Media Networks operations and Parks & Resorts…To date, Walt Disney World attendance is down roughly 25% versus the first quarter of last year. We expect hotel occupancy to be down by approximately 20 and 15 percentage points for Walt Disney World and Disneyland, respectively, compared to the first quarter of last year. Media Networks: Revenues decreased 2%, or $232 million, to $9.6 billion, driven by decreases of $566 million at Broadcasting, partially offset by increases of $334 million at the Cable Networks. The decrease at Broadcasting was driven by lower ratings and the soft advertising market at the ABC television network and the Company’s owned television stations and radio operations. Parks and Resorts: Revenues increased 3%, or $195 million, to $7.0 billion, driven primarily by growth of $278 million at the Disneyland Resort, $44 million from Disney Cruise Line and $20 million in higher royalties from Tokyo Disneyland, partially offset by a decrease of $187 million at the Walt Disney World Resort…Both the Disneyland Resort and Walt Disney World Resort were impacted by park closures on September 11th and from lower attendance and hotel occupancy due to cancellations and reduced travel during the last three weeks of September. Studio Entertainment: Revenues increased 2%, or $95 million, to $6.1 billion, driven by growth of $316 million in worldwide home video and $126 million in stage plays, partially offset by a decline of $306 million in worldwide theatrical motion picture distribution. Consumer Products: Revenues decreased 6%, or $158 million, to $2.6 billion, primarily reflecting declines of $157 million at the Disney Stores, which were driven by lower comparative store sales in North America, as well as the disposition of Fairchild Publications in the first quarter of the prior year. 2000 Compared to 1999 Media Networks: Revenues increased 23%, or $1.8 billion, to $9.8 billion, driven by increases of $1.2 billion at Broadcasting and $636 million at the Cable Networks. Broadcasting revenue growth reflected increased advertising revenues at the television networks and the Company’s owned television stations due to a strong advertising market, the continued success of Who Wants to Be a Millionaire and higher overall ratings on network programming. Parks and Resorts: Revenues increased 11%, or $668 million, to $6.8 billion, driven by growth of $383 million at the Walt Disney World Resort, reflecting increased guest spending, record attendance and record occupied room nights; $129 million from Disney Cruise Line; and $35 million from increased attendance and guest spending at Disneyland. Studio Entertainment: Revenues decreased 3%, or $165 million, to $6.0 billion, driven by declines of $206 million in network television production and distribution, $168 million in worldwide home video and $58 million in domestic theatrical motion picture distribution, partially offset by growth of $197 million in international theatrical motion picture distribution and $88 million in stage plays. Consumer Products: Revenues decreased 12%, or $364 million, to $2.8 billion, reflecting declines of $163 million at Fairchild Publications, $135 million in worldwide merchandise licensing and publishing, partially offset by growth of $22 million at Disney Interactive. Revenues decreased at Fairchild Publications as it was sold in the first quarter of fiscal 2000. Lower merchandise licensing and publishing revenues were primarily attributable to declines domestically and in Europe. Disney Interactive revenues increased due to the success of the Who Wants to Be a Millionaire video games, Pooh learning titles and the Toy Story 2 action game. Sales increased 15 percent to $10 billion in 2000, reflecting strong revenue resulting from new and established hotels, contributions from established Senior Living communities, as well as new customers in our Distribution Services business. System wide sales increased by 12 percent to $19.8 billion in 2000.”30 AnalysisQuestion 1. Is the price of the stock in the buy zone of greater than $10 and less than $60?Since 1997, the price of stock for the Disney Corporation has risen and fallen as indicated on the chart below. This chart also compares the stock price of the Disney Corporation with the Dow Jones Industrial Average (DJIA) and the S&P 500 Average. 
Figure 26. Disney International stock prices since March 199731 Marriott stock prices have consistently sold between $15 and $50. Response to question 1 is YES. Download 189.26 Kb. Share with your friends:
|