Thursday August 9, 2012
Avengers power Disney earnings
LOS ANGELES: Walt Disney Co's quarterly earnings rose 31%, exceeding Wall Street expectations, lifted by higher spending at theme parks and the blockbuster The Avengers superhero movie.
The media and theme park company reported on Tuesday earnings per share of US$1.01, beating the 93 cents a share that analysts had forecast, according to Thomson Reuters I/B/E/S.
Net income rose 24% to US$1.8bil for the three months ended June.
Driven by The Avengers, which has made more than US$1.4bil worldwide, studio income increased to US$313mil from US$49mil a year earlier. Chief executive Bob Iger announced that the company had signed a deal with The Avengers director Joss Whedon to write and direct an Avengers sequel, and to help develop a Marvel-based TV series for the ABC broadcast network.
The studio results offset a decline in earnings at Disney's powerhouse ESPN sports network, which the company said was due to the timing of deferred affiliate fees. Overall its cable TV unit, the company's largest, increased by 1% to US$1.86bil.
Advertising at ESPN grew in the quarter, helped by NBA games. Looking ahead, Iger said he was bullish about ESPN's ad prospects “for the next number of months, maybe for the next year”.
Advertising revenue at ABC “decreased modestly” from lower ratings partially offset by higher rates, Disney said.
At theme parks, earnings rose 21%, the result of increases at its Tokyo theme park, where the company collects management and other fees, and which was impacted last year by a temporary suspension of operations following the March 2011 earthquake.
Park results also improved due to a new cruise ship and more guests at Disneyland in California, where the company just completed a major expansion that includes “Cars Land.”
Disney “showed great momentum across all their business lines”, said Lazard Capital Markets analyst Barton Crockett. “I thought it was a great quarter.”
In afterhours trading, Disney shares declined 0.8% to US$49.40, down from their earlier close of US$49.81 on the New York Stock Exchange.
Disney shares were near a lifetime high and the drop might have been due to profit-taking, Crockett said. “The stock had a very good improvement into the earnings report.” - Reuters