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