Walt Disney Company Unit
TheWalt Disney Company is one of the largest and most recognized brandsglobally. The firm which is headquartered in Burbank California buthas operations in several countries around the world was founded in1923 as a cartoon studio by brothers Walt and Roy Disney. The firmwas named after the two brothers as “DisneyBrothers Cartoon Studio”.In 1926, the name was changed to Disney Studio and two years laterthe Mickey Mouse and Minnie Mouse characters debut in the first eversynchronized sound cartoon. By 1983, the firm introduced its firstever TV channel. The firm has gone on to produce several movies andcartoon characters over the years that have defined its brand.
Thefirm together with its subsidiaries operates in five key marketsegments: media networks (TV channels such as ABC), parks and resorts(theme parks e.g Disneyworld), studio entertainment (filmproduction), consumer products (e.g comics & toys), andinteractive media. Recently, the firm introduced the Disney Cruiseline which operates a luxury cruise ships. Today the firm is owned bygroup of shareholders with the largest institutional shareholderhaving less than 5% stake individually. The company’s first everIPO was made in 1940. Today, it employs over 180,000 people all overthe world and EuroDisney (subsidiary) is listed in the London stockexchange.
Thefirm has enjoyed mixed performances over the years in the New YorkStake exchange (DIS) with the latest share price as at 26thJanuary being $94.97. This represented $161.04 billion of marketcapitalization and a marginal 0.26% increase over the previoustrading stock price. This was against an industry drop in share priceof 0.63%. The main competitors in the industry are Time Warner andTwenty-First Century Fox Inc in the US. Outside the US, the firmcompetes with other minor to large players in various countries suchas Japan which has numerous theme parks and resorts competing againstTokyoDisneyResort.
Thefirm’s revenues are impressive at $48.813 billion for the financialyear ending September 2014. This was against $45.041 billion recordedin 2013 and 42.278 billion in 2012. Profits also hit a new high of22.393 in 2014. The firm’s operating expenses have been growingfrom $ 55 million in 2012 to 10.993 billion in 2014. The same caseapplies to operating income which has grown at a slower rate from$7.726 billion in 2012 to $11.4 billion in 2014. The firm’s returnon capital ratio stands at 9.07% and its book/value share capitalstands at $26.51 billion. Return on equity stands at 16.62% withrevenue per share standing at 28.05% which is impressive by industrystandards.
However,some of its subsidiaries are not performing that well. The firmreleased a rescue package of $1.3 billion to Disneyland Paris to addattractions after a petition signed by over 8000 people complained ofmediocre attractions, poor service and poor maintenance at the themepark. The park has been registering losses and the rescue package isintended to revamp the park and drive up sales and traffic. In theUS, box office success in the movie ‘American Sniper’ has buoyedthe financial performance of the firm in the stock market accordingto analysts. However, other developments such as measles outbreaks inthe US could affect traffic to theme parks.
Fromthe summary, Disney is a healthy company for investors. Its revenuestream and financial ratios are healthy. Additionally, the leadershipof the firm led by Bob Iger seems to have earned the trust ofinvestors and is applying the right business strategy.
Palmeri,C., Mawad, M. Miecamp, J.(2015). Disney $1.3 billion rescue showsParis parks too big
tofail. Retrieved fromhttp://www.bloomberg.com/news/2014-10-08/disney-1-billion-euro-bailout-proves-paris-parks-too-big-to-fail.html
TheWalt Disney Company (2015). Retrieved fromhttp://finance.yahoo.com/q?s=DIS
TheWalt Disney Company (2015). Retrieved from