Disney Cruise Line has announced two new ships to enter service in 2011 and 2012. At 122,000 tons and 2,500 passengers (double occupancy) each, they will more than double the line’s present capacity.

Disney launched its own cruise brand when the 83,000-ton, 1,750-passenger Disney Magic entered service in 1998, followed by the sister ship, the Wonder, in 1999.

Thus, the announcement comes eight years after Disney’s new ships were introduced and it will be 12 years between the delivery of the Wonder and the next new building.

The parent company, The Walt Disney Company, has been working its way through some executive and financial issues over the past several years, with its share price slumping since 2000, but now looking strong again.

At press time, Disney’s shares traded for $34.50, compared to a 52-week low/high of $26.75/$36.09. The average 12-month price target is $3 8. 81.

Q1

Disney reported net income of $1.7 billion, or $0.79 per share, on revenues of $9.7 billion for its first quarter ended Dec. 30, 2006, compared to net income of 734 million, or $0.37 per share, on revenues of $8.6 billion for its first quarter of 2006.

Operating income was $2.0 billion this year, compared to $1.4 billion last year.

The results also included one-time gains from the sales of assets of $1.1 billion and charges of $48 million this year, compared to one-time gains last year of $627 million.

When one-time gains and costs are excluded, Disney would have posted net income of $697 million this year, compared to $107 million last year.

The operating margin was 20.5 percent and the net income margin was 6.4 percent, excluding one-time gains and expenses.

In its financial statement, the company stated that for its parks and resorts segment (which includes its cruise brand), revenues and operating income was up due to increased guest spending driven by higher average ticket prices and increased attendance, partially offset by higher operating costs.

Disney’s four business segments – media networks, parks and resorts (which includes Disney Cruise Line), studio entertainment and consumer products – generated $3.9 billion, $2.5 billion, $2.6 billion and $692 million in revenues, respectively, for Ql . Operating income was $750 million for media networks; $405 million for parks and resorts; $604 million for studio entertainment; and $235 million for consumer products.

For its 2006 fiscal year ended Sept. 30, Disney reported net income of$3.8 billion, or $1.64 per share, on revenues of$34.3 billion, compared to net income of $2.5 billion, or $1.22 per share, on revenues of $32 billion for 2005.

Deployment

Disney’s 2007 market capacity is estimated at approximately 262,500 passengers, by Cruise Industry News. This is down slightly from 264,250 in 2006 due to the longer cruises in the Mediterranean. In 2008, Disney’s capacity should be back up again, and eventually spike to more than half a million passengers by 2012, pending the length of cruises. In addition to its Port Canaveral deployment, with more ships, Disney is expected to sail in Alaska, the Northeast and Europe.