Walt Disney Co. Cutting Expenditures 'Significantly' in 2013
The Walt Disney Co. has been spending lots of money to improve its theme parks and cruise line, but the media conglomerate will see a "significant" drop in capital expenditures in 2013, CFO Jay Rasulo said Thursday.
Speaking at the Goldman Sachs Communacopia Conference in New York, Rasulo said that after Fantasyland in Florida is upgraded, "The next project of size in Florida will be Avatarland in Disney's Animal Kingdom."
"We will see a significant drop in capital expenditures in 2013," the CFO said. "Of course, Shanghai is ramping up for its opening in 2015. So on a consolidated basis you'll start to see new capital spending show up in our capex line for Shanghai Disneyland, and remember, that project is roughly $4.3 billion, of which we are investing 43 percent and the Chinese government 57 percent."
Hear his remarks here.
As Disney executives are prone to do nowadays, Rasulo praised improvements at Disney California Adventure, saying that about half of the visitors to Disneyland hit the smaller park, up from 30 percent previously, and they spend six-to-seven hours there instead of just four or five.
Cars Land and other upgrades at California Adventure "fundamentally changed the dynamic there," said Rasulo, adding that it has enabled the company to "price aggressively."
If there's a hiccup in the theme parks and resorts business, it's Europe, where the economy is "extremely unpredictable," Rasulo said.
Rasulo's Wall Street presentation, his second in a week, comes as Disney's shares have been pressing against all-time highs. On Thursday, Credit Suisse raised its target price on shares by $2 to $58. The stock closed Wednesday at $52.70.