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Disney Raises Theme Park Ticket Prices

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As per media reports, The Walt Disney Co (DIS - Free Report) has increased ticket prices of its Orlando-based Walt Disney World Park for the second time in last eight months. The company had last hiked prices in Jun 2013.

The hike comes as a surprise as Disney generally raises its ticket prices during May-June, when the schools close. The ticket price per person now stands at $99, up more than 4% from last year. The company also announced price hikes for its other theme parks namely Epcot, Animal Kingdom and Hollywood Studios. These theme parks will now charge $94 per person, up from $90 earlier.  

The early hike could possibly be stemming from the fact that this year, Easter will fall on April 20 in the third quarter. Hence, to meet revenue targets for the second quarter, management has likely raised the ticket prices.

During last earnings release, Management was expecting operating income at Parks and Resorts to fall by $45 million in the second quarter as the shift of one week will place the Easter holiday entirely in the third quarter. In the first quarter of fiscal 2014, Parks and Resorts revenues rose 6% to $3,597 million, while the segment’s operating income increased 16% to $671 million.

With Disney increasing ticket prices, we are likely to see upward price revisions in other theme parks, notably, Universal Studios Florida and LEGOLAND Florida among others.

Another recent development at Disney was that The Walt Disney Studios launched its cloud-oriented digital movie service “Disney Movies Anywhere.” This app compatible with iPhone, iPad and iPod touch, will allow consumers to find out, buy, manage, and watch any movies from Disney, Pixar, and Marvel studios at their convenience.  

Currently, Disney sports a Zacks Rank #2 (Buy). Other better ranked media/ publishing stocks that can be considered for investment include DreamWorks Animation SKG Inc. , Lions Gate Entertainment Corp. and News Corp. (NWSA - Free Report) . DreamWorks Animation sports a Zacks Rank#1 (Strong Buy) whereas Lions Gate and News Corporation carry a Zacks Rank #2 (Buy).

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