It seems just a few short years ago when Disney (DIS) looked like it would be stumbling for years on end. Even when they bought Pixar last year I thought Pixar was the one that was getting the real bad end of the deal at the time. They didn't seem to be able to find that old magic that made them who they were in the minds of their customers. Things have changed since then!
When you look at some of the numbers and projects that Disney has been putting up and getting into, it looks like they should be going full speed ahead for a long time.
They ended up having a good year in 2006. Total revenue for the year came in at $34.3 billion. The key elements of the company (parks and resorts, media networks, studio entertainment, and consumer products) all showed strong growth in operating income.
The company also generated $4.8 billion in free cash flow while having diluted earnings surge by almost 35 percent, reaching $1.64 a share. From four years ago, free cash flow has increased to almost four times what it was at that time.
Overall revenue has grown by 50 percent during the last four years as well, with net income more than double what it was. Operating margins finished up at 19 percent for the year, better than most big media companies. Viacom (VIA-B) was ahead of them with a whopping 24 percent in operating margins.
Another amazing feat that Disney performed was that in the quarter ending in December of 2006, the company sold 130 million DVDs, something the majority of media companies have trouble doing in an entire year. This year even looks better as the company started fast as they've already increased their profitability by 43 percent.
A couple of areas they've wanted to improve in was their animation department, which the acquistion of Pixar should take care of, and the growth of their Internet properties has been a little slower than they wanted. But all of that still suggests a lot of room for growth. They also just opened up their first retail store in India (a stationary store) which should be the first step to significant growth there indefinitely.
The bottom line is that Disney is looking strong. They've made a lot of right moves and are aggressively pursuing the Internet as a serious moneymaker. They also announced that they're going to double the size of their cruise-ship fleet and is looking at creating miniature theme-park like attractions all over the world.
There are a lot of areas that Disney can grow in, and many of them are just getting started or beginning to grow strong. The future looks bright for them under Robert Iger's leadership.
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