Disney jumps as income up on resorts, ABC
Disney California Adventure guests walk onto the real snow at the new “Frozen” attraction Olaf’s Snow Fest at Disney California Adventure in Anaheim, California on Jan. 5, 2015. (AP)
The Walt Disney Co. (DIS)[1] said Tuesday fiscal second-quarter earnings rose 10% as its broadcasting unit’s higher affiliate fees and advertising sales and Disney resorts’ rising prices compensated for the weakened movie business and ESPN’s steep programming costs.
Its net income for the three-month period that ended on March 28 was $2.1 billion vs. $1.9 billion a year ago.
After adjusting for some items, earnings per share totaled $1.23, beating analysts’ estimate of $1.11.
Shares rose 2.2% to $113.45 in pre-market trading.
Company-wide revenue rose 7% to $12.5 billion.
“Our second-quarter performance … demonstrates the incredible ability of our strong brands and quality content to drive results,” Disney CEO Robert Iger said in a statement, noting that Marvel’s Avengers: Age of Ultron recently has opened “at number one in every market so far.”
Revenue for the media networks unit, which includes ABC, ESPN, Disney Jr. and other cable networks, rose 13% to $5.8 billion.
ESPN’s programming and production costs hurt its bottom line, as the prices paid to broadcast NBA, NFL and other live games continue to climb. But given its popularity, the sports network generated higher affiliate and advertising revenues.
The broadcasting business, which primarily includes ABC, also brought in more affiliate fees and programming and advertising sales than a year ago. “The increase in program sales was driven by the sale of Marvel’s Daredevil and higher sales of Lost and Once Upon A Time, partially offset by the sale of Wife Swap in the prior-year quarter,” Disney said.
The parks and resorts unit reported a 6% revenue gain to $3.8 billion as it counted more visitors at domestic Disney resorts and higher spending per guest.
Studio entertainment revenues fell 6% to $1.7 billion. Disney said year-ago box office sales of its phenomenal hit Frozen marred the second quarter’s performance in comparison. “The decreases in domestic home entertainment and international theatrical distribution both reflected the performance of Big Hero 6 in the current quarter compared to Frozen in the prior-year quarter,” Disney said.
Consumer products revenues increased 10% to $971 million as Frozen-related toys remain hot sellers.
The interactive unit, which runs its digital businesses, reported a 12% revenue decline to $235 million as sales of mobile games dipped.