Some reasons why Walt Disney Co. had an underperforming quarter are described by Zacks analyst’s blog. “Studios and Parks & Resorts is where the main concerns were coming into the earnings report, and they proved to be where the quarterly weakness existed. The Japanese earthquake and tsunami helped the Parks group fall 7% in the quarter, and the box office flop "Mars Needs Moms" assisted a disappointing quarter for Disney's film studios, which were down 13%.” For more on Zacks blog click here.
Walt Disney Co. is going to potentially have to wait out the drops in Studios and Parks & Resorts over the long term, because the tsunami situation is going to take a while before things get back to normal. Another factor that could hurt Disney’s theme parks that has everyone holding a collective breath is the fact that as of now with the gas prices as high as they are, could have a big impact on the summer travelers who may be planning trips to Disney who instead opt for something closer or cheaper.
Another situation that is out of their control which could have a huge impact is the NFL lockout. If the lockout which is still a while away from being resolved does go into the season, this would seriously hurt Disney owned ESPN for reasons like the lack of revenue from Monday Night Football and other games.
On the plus side Walt Disney Co. has the summer to look forward to in another division and that is because Disney’s film studios have big blockbusters being released which include "Pirates of the Caribbean on Stranger Tides" and "Cars 2" which should bring in big returns, as well as the recently released "Thor" which can help soften some other losses.
Sources
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