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Media Decoder Blog: Costs at ESPN Depress Disney Profits

February 5, 2013 by Leave a Comment

LOS ANGELES – Higher costs at ESPN and lower DVD sales resulted in a 6 percent decline in quarterly profit at Disney, the company said on Tuesday. But Disney’s video game and Web unit finally swung to the black and the conglomerate steered attention toward potential future growth fueled by the “Star Wars” franchise.

Robert A. Iger, chairman and chief executive of the Walt Disney Company, speaking on CNBC shortly after the market’s close, said that Disney’s newly acquired Lucasfilm division would produce “a few” additional movies in the coming years that feature characters and stories from the “Star Wars” universe.

Lawrence Kasdan, known for his work on “The Empire Strikes Back” and “Return of the Jedi,” and Simon Kinberg, a screenwriter whose credits include “Sherlock Holmes,” are both working on the “stand-alone” films, Mr. Iger said. Disney has previously announced plans to make installments seven, eight and nine in the “Star Wars” saga over a six-year period starting in 2015.

Investors and analysts had been expecting a bumpy quarter. Disney made the unusual decision in November to note publicly some of its upcoming difficulties, like higher ESPN programming costs and a calendar quirk that would hurt theme parks by moving part of the New Year’s holiday into a different quarter.

Even so, Disney beat Wall Street estimates of 76 cents a share. For the quarter, which ended on Dec. 29, Disney reported net income of $1.38 billion, or 77 cents a share, down from $1.46 billion, or 80 cents a share, in the same quarter a year earlier. Excluding one-time charges and gains, Disney reported 79 cents a share for the most recent quarter, the first in the company’s fiscal year.

Revenue climbed 5 percent, to $11.3 billion.

ESPN had a significant impact on Disney’s quarter, with programming expenses increasing for football and basketball. Those costs held back results for Disney’s media networks unit, which houses the cable sports behemoth; operating income there increased a tepid 2 percent, to $1.21 billion. The growth came from Disney Channel, ABC Family and higher ad sales at the ABC broadcast network.

The biggest drag on Disney’s quarter, however, came from Walt Disney Studios, which reported a 43 percent drop in operating income, to $234 million. The problem involved comparability: DVD sales for “Brave” and “Cinderella” were slight compared with disc releases in the same period a year earlier, notably “Cars 2” and “The Lion King.”

Theme parks continued to be a bright spot. Operating income in Disney’s parks and resorts division, watched as a barometer of the broader economy, increased 4 percent in the most recent quarter, to $577 million. Higher attendance at Disneyland Resort in California, where a “Cars”-themed area opened last summer, contributed to the growth, as did strong bookings on the company’s Fantasy cruise ship.

Interactive media, a business unit that includes video games and Disney.com, swung to an operating profit of $9 million after 16 consecutive quarters of losses. The company cited growth from Disney-branded cellphones in Japan as part of the reason.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/05/costs-at-espn-depress-disney-profits/?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

DealBook: Societe Generale Profit Plunged in Third Quarter

November 8, 2012 by Leave a Comment

The headquarters of Société Générale in Paris.Jacky Naegelen/ReutersThe headquarters of Société Générale in Paris.

9:53 a.m. | Updated

PARIS – Société Générale, the big French bank, said on Thursday that its third-quarter profit plunged as it booked large one-time charges.

The bank reported that net income fell 86 percent, to 85 million euros ($108 million), from 622 million euros in the period a year earlier – well below the 139 million euros analysts surveyed by Reuters had been expecting. The bank said net revenue declined 17 percent, to 5.4 billion euros.

Société Générale, based in Paris, said its bottom line was hurt by one-time charges that included a cost of 389 million euros for revaluing its own debt. It also wrote down good will and had losses on the sale of assets in Greece and the United States. Excluding those items, the bank said underlying net income was 856 million euros.

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Frédéric Oudéa, the chairman and chief executive, said in a statement that the bank’s businesses “have once again demonstrated their resilience and capital-generating capacity. The quality of our portfolios and the attention we pay to managing our risks have enabled us to limit the cost of risk in a strained economic environment.”

Société Générale said its corporate and investment banking unit had completed a loan-disposal plan begun in June 2011, having sold or amortized 16 billion euros worth of assets and cutting the units legacy assets by about two-thirds. Its legacy assets below investment grade were reduced to 3.2 billion euros by mid-October.

The bank came under market pressure last year because of its exposure to so-called peripheral euro zone nations and has been scaling back in that region.

It said in September it would sell its 99 percent holding in its Greek subsidiary, Geniki Bank, to Piraeus Bank. It also announced plans to sell TCW, an American asset-management business, to Carlyle Group and TCW’s management. A California judge has issued a tentative order that could block or delay the TCW deal as he considers whether to allow a lawsuit by EIG Global Energy Partners to proceed.

Société Générale said its core Tier 1 ratio, a measure of a firm’s ability to weather financial shocks, rose to 10.3 percent at the end of September, based on so-called Basel 2.5 capital adequacy rules – a slight improvement from the second quarter. It said it expected to achieve a Basel III core Tier 1 capital ratio “of between 9 percent and 9.5 percent” by the end of next year.

French banks, though, continue to face significant worries.

The ratings agency Standard Poor’s changed its outlook in October on Société Générale to negative from stable, citing a growing level of economic risk to the country’s banking system, both from the slumping euro zone economy and the likelihood of a downturn in the French housing sector. S.P. also cut its credit rating on the largest French bank, BNP Paribas, by one notch to A+/A-1, the same level as Société Générale.

This post has been revised to reflect the following correction:

Correction: November 8, 2012

An earlier version of this post misstated a capital measurement system to which Société Générale referred. The bank said it expected to achieve a target of a Basel III core tier 1 capital ratio, not a Basel II core tier 1 capital ratio.

Article source: http://dealbook.nytimes.com/2012/11/08/societe-generale-profit-plunges-in-third-quarter/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Media Decoder: Gannett Earnings Fall

April 18, 2011 by Leave a Comment

Earnings at Gannett, publisher of USA Today and dozens of local newspapers across the country, fell in the first quarter as the print advertising market remained stubbornly soft.

The company said Monday that net income dropped by 23 percent, to $90.5 million, from January through March, compared with $117.2 million in the same period a year earlier. On a per share diluted basis, earnings were 37 cents, compared with 49 cents last year.

Some one-time charges — $7.7 million for facility consolidations and $6 million for expenses related to work force downsizing — were a factor.

Revenue at Gannett’s publishing unit, which includes its 82 daily newspapers in the United States, dropped 6.2 percent, to $929.8 million. Advertising revenue in the publishing unit fell 7.3 percent, to $601.7 million, as real estate and legal advertising fell by double digits. The brights spots domestically were in automotive ads, up 6.1 percent, and employment ads, up 7.3 percent.

“Our publishing segment results for the quarter reflect the current state of the domestic economy,” said Craig Dubow, chief executive. “However, softness persists in certain sectors, particularly in the real estate market here.”

The weakness in advertising was not confined to Gannett’s newspaper division. Its broadcast unit also experienced a decline, in part because of a strong first quarter in 2010 that was buoyed by the winter Olympics, political advertising and the Super Bowl, which was moved this year to Fox from CBS. Most Gannett stations are ABC, NBC and CBS affiliates.

Television revenue declined $3 million over all, to $158.3 million, reflecting the absence of $18.6 million in Olympics ads, $3.3 million in political ads and $2.2 million in Super Bowl spending.

Article source: http://feeds.nytimes.com/click.phdo?i=08baab29de44b93482e01895673fc3bf

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