Like the rest of its big media brethern, much of Disney’s fortunes are dependent on the advertising business. But unlike its peers, a big chunk of Disney’s money — about a third of its revenues — comes directly from consumer spending on its resorts and parks. Analysts have been worrying about how that revenue stream would fare in a recession for a while, but Disney has insisted that traffic to Disney World and Disneyland isn’t slowing down.
Now Pali’s Rich Greenfield isn’t so sure. He thinks that Delta’s flights to Orlando will be down 26% in October, and down 12% plus for the last three months of 2008. And he thinks that will continue into next year, prompting him to cut both top and bottom line growth estimates company-wide; he thinks the parks unit, meanwhile, will see revenues decrease by 0.6% and operating income drop by 2.3%.
Looking for good news? Rich has seen a screening of “Wall-E,” Disney’s newest Pixar release, and thinks it’s really good: “the film substantially exceeded our expectations and was well-received by the audience. We expect the film to receive critical praise and reviews.”