Listening in on Disney Conference call….

Here are the highlights so far from today’s Q1 conference call for the quarter ending Dec. ‘08. Bob is of course CEO Bob Iger and Tom is Tom Staggs, CFO.

The biggest one for all of YOU is that Disney Parks and Resorts has extended the ‘Get 7 for 4 Deal’ booking window into mid-march, and the offer window will be extended next week from June to the middle of August (wonder if they will still do free food in Florida?).

Discounts from Q1 didn’t include anything from the 7 for 4 deal, so expect revenues to be even lower going forward from what I can tell. If you own stock, expect a further price decline possibly.

Bookings for Q2 & Q3 are essentially flat from last year, which is good, but on higher discounts and lower spending by customers.

Last quarter was down 5% in NA, and lower merchandise spending was slightly made up for by higher ticket prices (ever wonder how your purchasing affected gate prices? Now you know.).

Foreign parks continued to do well overall.

Hotel spending is up modestly, but the rest is flat to down.

Both Bob and Tom also noted that they will not necessarily continue to cut costs just to make numbers, focusing on overall experience. Don’t expect that to mean your favorite thing won’t get cut, but that wholesale closings are unlikely as well.

The biggest hit for the quarter though was against fuel hedging. My guess is that they made a bet on future fuel for the Cruise Line and got nailed when gas fell through that price floor in October/November and is just now starting to moderate again. That hurts.

Resident attendance of the Parks has been fairly soft, more so than the other areas in P&R. So you locals aren’t turning out like you used too, though California is still better than in Florida.

Bob says more interested in keeping attendance up through price reductions than managing revenues by keeping prices up and accepting lower attendance. He called that keeping the 'pump primed' since the experience is what’s important in P&R, even if that means tighter margins.

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In other news, DVD sales are getting HAMMERED, and that’s really hurting sales. Bob noted in Q&A that the average household has about 140 DVDs, which means that maybe that market is getting more selective. They will continue to release DVDs as events, and NOT move to selling bargain DVDs or package sets (i.e. don't expect a return to the Toon Studio 'crap'-quel days of yore).

They also reported the Disney Internet Media Group as a separate group for the first time: it lost money. They, like everybody else, are getting squeezed on margins, especially in video games.

They are looking at aggressive cost reductions across the LOB (line of business), especially in Corporate. I read that to mean expect more announcements of layoffs, trimmed schedules, etc. Expect jobs to remain VERY tight.