April 25, 2024

Disney Reports Strong Second-Quarter Profit

Strength in all of the Walt Disney Company’s primary businesses — theme parks, cable television, movies, consumer products — helped the entertainment conglomerate increase its quarterly profit by 32 percent from a year earlier, to $1.51 billion. Revenue climbed 10 percent, to $10.55 billion.

The financial results, reported on Tuesday, revealed a couple of smaller weak spots, namely the ABC broadcast network and Disney’s video game division. But the company’s performance as a whole beat rivals like Comcast, Time Warner and Viacom.

Disney shares, which closed at $66.07 on Tuesday, have risen 51 percent over the last year. “The company is obviously hitting on almost all cylinders,” Jessica Reif Cohen, a senior analyst at Bank of America Merrill Lynch, said on a conference call on Tuesday.

Reasons for growth included the improving economy; expanded theme parks in Florida, California and Hong Kong; a stabilizing moviemaking operation; the acquisition of Marvel Entertainment; and climbing merchandise sales, particularly for Disney Channel-related products. The company also benefited from a calendar quirk that moved part of the New Year’s and Easter holidays into the quarter.

Operating income at Media Networks, a division that includes ESPN, totaled $1.86 billion in the quarter, an 8 percent improvement from the year-earlier period. During the quarter, which ended on March 30, ESPN benefited from increased ad sales and a reduction in revenue deferrals as required by certain affiliate contracts.

Walt Disney Parks and Resorts reported operating income of $383 million, a 73 percent increase. New attractions — a “Cars”-themed area in California, a Fantasyland expansion in Florida — helped Disney’s North American parks deliver an 8 percent increase in attendance and a 10 percent increase in per-capita spending on items like food. A new cruise ship, the Fantasy, also lifted the division’s results.

In the year-ago quarter, Disney’s movie studio lost money as it struggled with runaway costs tied to the science-fiction debacle “John Carter.” On Tuesday Walt Disney Studios, citing the successful release of “Oz the Great and Powerful,” reported operating income of $118 million. Disney said that prerelease marketing expenses for the July arrival of “The Lone Ranger” may affect coming results, however.

Iron Man and other Marvel-related merchandise contributed to operating income of $200 million at Disney’s consumer products unit, a 35 percent increase.

Over all, Disney reported earnings of 79 cents a share for the quarter, an increase of 36 percent from 58 cents a year earlier. Analysts had expected earnings of 76 cents a share. Including one-time gains from tax benefits and the sale of a business, Disney had earnings in the current quarter of 83 cents a share.

With so much going right for the company, Disney’s two troubled areas — broadcast television and video games — stood out like sore thumbs. But each of those businesses has a relatively small impact on Disney’s performance.

Broadcast operating income fell 40 percent, to $138 million, as lower ratings (and thus ad revenue) and higher programming costs at the struggling ABC network offset sturdier financial results at Disney’s local TV stations. “We could use a few more new hits, and hits that we own,” Robert A. Iger, Disney’s chairman and chief executive, said of ABC on a conference call.

Mr. Iger added that he is “more than reasonably encouraged” by ABC’s planned shows for the fall and called ABC’s managers “a great team.”

Disney’s interactive division, which includes Disney.com and video games, lost $54 million in the quarter, an improvement from a loss of $70 million. Disney continues to hope that a turnaround is on the horizon for its video game business. On Monday the company announced an exclusive multiyear deal with Electronic Arts to produce Star Wars games.

Disney is also preparing to introduce Infinity, an ambitious video game and toy initiative that it hopes will be its version of Skylanders, an Activision Blizzard product that has generated more than $1 billion in global sales since its 2011 arrival. Infinity was initially supposed to arrive in June but was delayed and is now scheduled for release in August.

This article has been revised to reflect the following correction:

Correction: May 7, 2013

An earlier version of this article misstated the performance of Disney’s stock on Tuesday. Disney shares rose 1.6 percent to $66.07 at the end of regular trading, not during after-hours trading.

Article source: http://www.nytimes.com/2013/05/08/business/media/disney-profits-soar-as-most-divisions-show-strength.html?partner=rss&emc=rss

Corner Office: Kenny Chesney: Country Singer, Songwriter and C.E.O

Q. So, you’re the C.E.O., in effect, of Kenny Chesney Inc. How big is the business?

A. I have 120 employees on the road every day, and about 30 other employees off the road. I remember being on the bus a couple years ago, and I looked out the window of my bus and said to myself: Who’s paying for this? And it hit me: You are! I was in charge of making sure that we get from Point A to Point B, that we all do it seamlessly and that we all do it effectively, and we all do it on time.

Q. Tell me what’s important to you in setting a tone and a culture among your employees?

A. It’s important for me to be sure that everybody knows what everybody else is doing. I want there to be a level of respect between everybody. You get that many people out on the road at once, and all of a sudden agendas sometimes can become a part of that. And sometimes they’re not your own. There’s this idea that somebody’s job could be more important than somebody else’s, and to me, that’s not true.

Q. So how do you make that real — everybody should have respect for everyone else — rather than just a slogan?

A. I want all the people out there who work with me to feel as appreciated as possible, especially the people who are the first to get up in the morning and the last to go to bed — my crew guys. Sometimes we do a “merch” lottery. We put everybody’s name in a huge sombrero and whoever’s name I pull out gets all of the money from merchandise sales for that night.

Q. How much money could that be from the merchandise?

A. Probably the biggest check was three hundred grand. But do you know what those guys did? This is why I think this kind of thing works: They waited until the end of the year and I wrote one big check to the crew and they divided it up 13 ways. Doing things like that just motivates people.

Q. What else do you do?

A. At the end of each year, I take the band, crew, the merchandise people, catering people, my management team, their wives, girlfriends, whatever, down to the Virgin Islands for a week to thank them. I pay for everything, and we’ve done it every year since 2002.

Q. I imagine a lot of artists just focus on the music and let others worry about the business. Obviously, you’ve not done that.

A. I don’t have the computer chip to say, “O.K., I’m just going to write my songs and sing them and the business is up to you guys.” I’m so hands-on, from the color of my tour bus to what I eat for dinner at 5 or the way the lights are hung. I mean, you could only imagine what diesel fuel costs me as an overall expense for this year. It’s exhausting, but that’s me. And my name’s on everything.

Q. Over the course of your life, what do you consider as some important leadership lessons?

A. An important mentor for me, in terms of teaching me that there’s a right way and a wrong way to do things, was probably my football coach. And playing football was one of the first times in my life that I realized nothing is given to you. You have to work really hard. I was a very short, slow wide receiver on a very mediocre football team. And we had to work really hard to be as mediocre as we were.

Q. What made you decide to get so involved in managing and leading your business?

A. For the first five years on the road, I didn’t make any money at all, and I had no idea what I was doing — none. I was fresh out of college, and I didn’t really think that this was going to last. But there were moments when I thought: What if it does last this long? What if this is going to be my life? And if it is, how am I going to approach it? And I realized that I wasn’t saving any money. I couldn’t afford a house. I had no investments. I had nothing.

And I sat down with my manager, Dale Morris, and told him what I wanted to do and realized that I wanted this to be my life. He had been in the business a long time, and he had a great business mind. That’s when I realized I didn’t just want to be a singer-songwriter and let everybody else take care of everything. And from that moment on, I started really paying attention to a lot of detail and to what I was making every night.

Q. What are some of the more subtle points of leadership you’ve had to learn?

A. It can be hard to be everybody’s friend and still show them that this is the way it’s got to be. And I’ve gone both ways. I’ve been everybody’s buddy and then it was tough because you put yourself in a position that’s not the best when you have to let people go. That was tough for me. I’m still kind of everybody’s buddy, but they know I’m the boss. I think it is possible to be friends with employees, but there has to be a respect level where you’re not taken advantage of, either.

Q. When you’re on the road, you’re spending a lot of time with your employees.

Article source: http://feeds.nytimes.com/click.phdo?i=54365bb2087b254a706113b7d6d486d9