Lower Disney Profit Beats ExpectationsTuesday, February 5, 2013
Walt Disney Co. late Tuesday reported a lower fiscal first quarter profit, as strong TV advertising revenue and gains at the entertainment giant’s theme parks were offset by lower DVD sales and higher costs to obtain rights for sporting events. But the results were a bit higher than expected.
After the markets closed, the Burbank company reported net income of $1.38 billion (77 cents a share), 6 percent lower than in the same period a year earlier. Revenue rose 5 percent to $11.3 billion. Analysts surveyed by Thomson Reuters on average had expected net income of 76 cents a share on revenue of $11.2 billion.
“After delivering another record year of growth in 2012, we're off to a solid start in fiscal 2013,” Chief Executive Bob Iger said in a statement.
Operating income at the company’s media networks unit rose just 2 percent to $1.21 billion. Gains at the Disney Channel, ABC Family and A&E Television Networks cable channels and strong ABC broadcast advertising revenue were offset by higher costs for obtaining rights to sporting events for the ESPN channels.
Operating income for Disney’s parks and resorts division rose 4 percent $577 million, driven by higher guest spending at both Walt Disney World Resort and Disneyland Resort, and the addition of the Disney Fantasy cruise ship. The company’s consumer products unit, which sells toys and other items based on licensed characters had 11 percent higher income to $346 million. A positive surprise was the company’s interactive media unit, which includes video games and Disney.com. It reported operating income of $9 million after 16 consecutive quarters of losses.
But at Walt Disney Studios, operating income fell 43 percent to $234 million. Among the challenges: DVD sales for “Brave” and a re-released “Cinderella” were not as strong as they were a year earlier for “Cars 2” and a re-released “The Lion King.”
Shares earlier closed up 39 cents, or less than 1 percent, to $54.29 on the New York Stock Exchange, and rose 2 percent in after-hours trading.