Weekly Media Notes: Disney World Ticket Prices, CBS Earnings And Fast & Furious Ride At Universal Studios

The media industry saw significant activity last week, with Disney increasing its theme parks ticket prices. On a separate note, CBS posted better than expected earnings. In an another, Comcast’s Universal Studios will bring Fast & Furious ride to its theme park this summer. On that note, we discuss below these developments related to the media companies over the last week or so.

Disney

Disney (NYSE:DIS) has increased its Disney World theme park ticket prices past Sunday from $99 to $105 for an adult. Animal kingdom ticket price is now $99, up from $94. ^[1] Disney as well as Universal Studios periodically raise the ticket prices for the theme parks. Ticket prices account for major portion of per capita guest spending, which has been on an uptrend over the past few years and amounted to $131 in 2014. Higher ticket prices will translate into higher guest spending and boost the segment revenues for Disney. We currently estimate the average guest spend to be around $138 in 2015. Despite a periodic growth in ticket prices, Disney has been able to grow the attendance at the theme parks due to the popularity of its characters, rides and continuous effort to bring in new rides to attract repeat visitors. Assuming a 4% attendance growth in 2015, Disney’s U.S. theme park revenues will be over $11 billion (excluding the hotel revenues), according to our estimates. This represents around 20% of the company’s overall revenues.

We estimate revenues of around $52.65 billion for Disney in 2015 and EPS of $4.90, which is in line with the market consensus of $4.46-$5.08, compiled by Thomson Reuters. We currently have a $105 price estimate for Disney’s shares, which is close to the current market price of $102.

CBS Corporation

CBS Corporation (NYSE:CBS) recently reported its fourth quarter earnings with 3% revenue growth and 8% jump in adjusted earnings to $0.77 per share. The company continues to see significant growth in retransmission fees, which led to an 11% growth in affiliate and subscription fees for the quarter. CBS benefited from Thursday Night Football and higher political spending, which boosted the advertising revenues during the December quarter. CBS continues to be the most watched network averaging 11.7 million viewers nightly in the current season. Accordingly, the company is seeing a high single-digit growth in the scatter market ad pricing over the upfront ad sales in the current quarter (See – Higher Advertising Income Boosts CBS’ Q4 Earnings).

We estimate revenues of about $14 billion for CBS Corporation in 2015 with EPS of 3.10, which is lower than the market consensus of  $3.60 compiled by Thomson Reuters. We currently have a $52 price estimate for CBS Corporation, which we will soon update to incorporate the recent quarterly earnings.

Comcast

Comcast’s (NASDAQ:CMCSA) Universal Studios will bring Fast & Furious ride into its theme park this summer. Universal said that the new ride will take the guests into “an exhilarating high-speed chase that exceeds 120 miles per hour and catapults into the high-stakes underworld of fast cars and international crime cartels.” ^[2] Like Disney, Universal Studios also brings in new rides to its theme parks to attract more visitors. Universal is already seeing higher attendance courtesy its Harry Potter Diagon Alley attraction and this new ride, which is a first ever nighttime studio tour, will further boost the attendance. The theme park has seen over 50% jump in attendance between 2009 and 2013. We currently estimate the theme park revenues to grow 8% to $2.57 billion in 2015.

We estimate revenues of about $72 billion for Comcast in 2015, with Non-GAAP EPS of $3.30, which is in line with the market consensus of $3.05-$3.67, compiled by Thomson Reuters. We currently have a $59 price estimate for Comcast, which is close to the current market price of $58.

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1. Disney Raises Ticket Prices At U.S. Theme Parks; Magic Kingdom Now $105, Huffington Post, Feb 23, 2015 [↩]
2. Fast & Furious – Supercharged, Universal Studios Hollywood [↩]