Disney parks seen on the rebound
By Russ Britt, CBS.MarketWatch.com
NEW YORK -- Walt Disney Co.'s theme parks may be on the mend, a development that could herald bullish revisions in earnings forecasts on the company, an analyst said Wednesday.
Stuart Linde of Lehman Bros. said he's taking another look at his first-quarter estimate of 10 cents a share now after finding out that airline traffic and hotel occupancy in and around Walt Disney World in Orlando, Fla., is showing signs of improvement.
"We believe the improvement at the parks could more than offset weakness in broadcasting and studio segments," Linde wrote in a research memo.
Receipts at Disney World, the company's biggest amusement park, account for nearly 30 percent of Disney cash flow, making it the single largest contributor to company coffers, Linde says.
Linde said that a recovery in the region's hotel occupancy and air travel was running ahead of expectations.
Hotel volume, which was off 1.2 percent year-over-year in March, had been down 6.5 percent in February and off nearly 15 percent in January, according to Linde. Air traffic to Orlando was off 14 percent in February and 21 percent in December.
Disney spokesman John Dreyer said the park has shown signs of improvement. The company, however, does not offer attendance figures.
"Business was such during Easter that they had to close the parking lots," Dreyer said. "We have cautious optimism."
Shares of Disney closed up 98 cents to $24.05.
Disney is scheduled to report second-quarter earnings on April 25.