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The Disneyland Report > Disney News > Hurricanes catching up with Disney? Disney NewsHurricanes catching up with Disney?By Russ Britt LOS ANGELES -- The effect of four hurricanes hitting Florida finally may be taking its toll on Walt Disney stock, as the entertainment giant's shares fell Tuesday on concerns of lower attendance at its theme parks. Analyst David Miller of Sanders Morris Harris issued a report saying there will be some impact on earnings from the barrage of storms that pummeled Florida and the Gulf Coast. Walt Disney World, the company's largest theme park, is based in Orlando, Fla. A component of the Dow Jones Industrial Average, Disney (DIS) dropped 57 cents, or 2.5 percent, to $22.60. It was the Dow's biggest loser on Tuesday. Miller lowered his fourth-quarter estimate for Disney earnings to 19 cents a share from 20 cents, saying the first two hurricanes that hit Florida -- Charley and Frances -- seemed to have done little physical damage and did not significantly hurt attendance. "However, it is now apparent that the eye of Jeanne, the fourth hurricane to hit the state of Florida in six weeks, moved directly over central Florida and forced the Orlando properties into closures that spanned the majority of last weekend," Miller wrote in his note. The analyst kept his "buy" rating on Disney stock. Disney executives said they don't give forecasts on quarterly results. "It's premature to give you a financial estimate," spokesman John Spelich added. However, the entertainment company's chief financial officer, Thomas Staggs, said earlier this month that Frances would reduce earnings by 1 cent a share. More impact from Frances Disney says its theme parks were closed longer when Frances hit than when Jeanne struck. Frances forced the closure of Disney World on the Saturday and Sunday before Labor Day, while Jeanne shut down the park on Saturday only. Analysts polled by Thomson First Call estimate Disney earnings will be 18 cents a share. The consensus hasn't changed since before the storms started. But analysts say the onslaught is likely to have some impact on the Disney's bottom line. Jeffrey Logsdon of Harris Nesbitt said local traffic from within Florida could be severely reduced by the storms. That traffic accounts for 30 percent of Disney World's business. "I think it's bound to play a role," he added. Bucking the tide is Douglas Mitchelson of Deutsche Bank, who maintained Disney's year-end earnings estimate of $1.07 a share, despite the storms. The company's fiscal year ends Thursday. Mitchelson also raised his estimate for fiscal 2005 by 5 cents to $1.25 a share. He said losses at ABC will be lower; fundamentals at ESPN are solid, television syndication profits are kicking in and benefits-cost growth at the theme parks is slowing. "We believe the market continues to carry a negative bias toward Disney's growth prospects, including the perception that the 50-plus percent earnings growth being delivered in fiscal 2004 was driven by unusual items that leave fiscal 2005 with little growth," the analyst wrote. To read the rest of this article, click here. Return to Disney News. |
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