Wall St. Misreads Disney (DIS) Results

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Disney (NYSE: DIS) certainly did well in the first quarter. Walt Disney himself would have been proud.

Revenue at the entertainment company moved up 10% to $8.71 billion. EPS rose 35% to $.58.

Wall St. opened the champagne and passed around the caviar. The Disney theme park business, which analysts view as a proxy for consumer spending, posted a revenue increase of 11% to $2.725 billion.

Of course, no one bothered to read the fine print. Easter moved into the first quarter this year. Last year it was in the second. No matter. Nice jump in sales anyway.

The total increase in Disney theme park revenue was well under $300 million.Given the shift in Easter, the number was probably closer to flat. That should indicate that consumer spending is at least OK, but only first class fools would think that is true.

Going to Disney Land probably costs most people a few thousand dollars. Id done completely on the cheap, it may be less. For Dad and Mom and two kids, the plane tickets must be over $1,000. Some people drive and save some money. Hotel rooms at the resorts are probably a couple of hundred dollars a night. The hot dogs and drinks in the parks are some of the most expensive in the world.

The Disney website shows a three-day pass to Disney Land is about $150 per person.

All of this is a long-winded way of saying that trips to the Disney resorts are not something the average man on the street can afford these days. With gas close to $4 a gallon, airlines raising ticket prices to stay out of Chapter 11, and people worried about their jobs, the folks going off to see Mickey are probably well-off compared to most families.

Take a look at the guy going to Disney Land. He drive a $35,000 car. He and his wife both work. He has on a Ralph Lauren shirt. He even tipped the doorman at the hotel.

He is not the guy economists are worried about.

Douglas A. McIntyre