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Walt Disney CEO Bob Iger on the company’s earnings and rising attendance at its theme parks despite concerns about the economy.
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Shares of Disney rallying today after the company reported record profits in -- third quarter.
The -- earnings driven by strong performances from its theme parks in the Blockbuster film the avenger -- The revenues did come in light of street expectations in a wide ranging interview I spoke with Walt Disney chairman and CEO Bob Iger.
About the company's earnings but what they may indicate about the health of the economy.
It's hard for me to comment -- the street's expectations that's not how we manage the company.
We have an ability to predict.
What our -- both our revenue and our bottom line is likely to look like.
Frequently the street does not and their estimates that this time around in terms of our revenue haven't -- a bit off but.
It has no in and in our view.
Real bearing on either how we manage the company or on what these results were from a quality perspective -- these were high quality results.
Not only were they as you pointed out the highest.
Quarter in the history of the company but every one of our businesses was up in terms of the bottom line from last year.
And the -- trends for these businesses generally speaking we're quite positive.
So the so called revenue -- is missive estimates by people who in my opinion.
You don't have the ability to.
See your estimate whatever revenue was going to be is certainly accurate later as accurately as we do.
Let me ask you about parks and resort revenue for the quarter which increased 9% I -- you were able.
To raise prices -- your parks it was one of the strongest spot.
That's kind of surprising given what is going on with the consumer right now what is your outlook on the consumer given what you were able to do in the parks.
Well I think it's marketplace that there is not that much visibility.
I think there's definitely some trepidation among the consumer.
About the economy.
Certainly the headlines have -- tendency to have an impact.
You see that in consumer confidence but what we're finding is that we've got product in the marketplace that has a very high price to value relationship its product that is in demand.
By the consumer.
They want to go to Disney parks users of family -- as individuals they love our product they know that the experience is going to be positive.
And we've continued to invest to make that a better experience so.
Even though the economy is some issues.
We found that the strength of the brand of the Disney theme park and resort brand.
And the product that we put in the experience that people have is enabling us not only to continue increase attendance where we've seen some.
Steady increases but to continue to increase increase pricing.
And spending that comes with that some people are.
Spending more -- -- because our ticket prices there hotel prices have gone up when they visit our parks are spending more in food and merchandise as well.
What is tell you about how they're feeling in the broader economy -- I mean as you look across all of your businesses.
And into movies as well do you feel like the consumer is feeling better or worse -- than a year ago.
You know I think it's very very hard to tell I think the consumer has.
Been somewhat picky in that they are focused a lot on price -- value relationship and with that comes a focus on quality and they're making decisions later so in effect there.
You know into in -- way you negotiating harder for pricing or or rating out sort of pricing to soon take advantage of you know potential discounting -- that's not the case -- us.
But I think it's a consumer that is just more discerning than they've been.
Before more discerning than last year not necessarily but I think it's a trend that we've continued to see certainly since the downturn -- no way to know non.
It and we here's CEO sort of across the board saying that they're delaying decision making because they're concerned about what's going on in the economy or even what the tax situation the corporate tax situation could be over time.
Would you classify yourself as being in that group as concern or holding back on decisions or are you operating as you -- any other time.
We don't really invest through cycles we invest for the long term when you make a decision to.
Build a cruise ship for a substantially improve and increase the size of the theme park.
You making that decision to have long term impact on the company.
And to be in the marketplace for a long time.
So in other words a cruise ship the -- launch.
There's not going to be in business just for a given year or through given cycle he'll be in business -- much longer than that the same thing with a theme parks so.
We've been investing.
Actually pretty aggressively in his last five years even though they've been relatively difficult years in terms of the economy.
Because these are long term -- their long term investments to deliver long term and improved bottom line value.
To our shareholders so we probably been the anti.
How -- anti cycle sort of speak.
And again thinking long term interestingly enough.
When -- making capital decisions during downturns she frequently actually save money because for instance construction costs were.
Lower in the United States because there are fewer projects large scale projects under construction so we were able to take advantage of labor costs and the cost immaterial.
Given the economic circumstance.
And that actually has benefited us.
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