The Walt Disney Co. on Tuesday posted a 54 percent jump in earnings in the latest quarter. The results beat analyst expectations thanks to higher advertising revenue at its ESPN and ABC television networks, stronger performance at its theme parks and cost cutting at its movie studio.
The company reported strength in all units, a sign that cost reductions, strategic shifts and a revived economy were helping the house of Mickey Mouse. Disney reported a slightly higher, though still modest loss in the interactive division, but revenue in that unit was up 58 percent.
ESPN in particular benefited from bigger audiences for football games and the return of automaker advertisers such as General Motors.
"They're just having a gangbuster advertising revenue quarter right now and we believe that's going to continue," said CEO Bob Iger, referring to ESPN on a conference call with analysts.
Net income in the three months to Jan. 1 hit $1.3 billion, or 68 cents per share, from $844 million, or 44 cents per share, a year earlier.
Revenue grew 10 percent to $10.7 billion from $9.7 billion a year ago.
Excluding unusual items, earnings also came to 68 cents per share, as the benefit of the $663 million sale of Miramax Films in December was more than offset by restructuring charges and taxes.
The adjusted figure topped the forecast of 56 cents per share by analysts polled by FactSet. Revenue for the fiscal first quarter also topped expectations of $10.5 billion.
"It was a very strong beat, much better than we had anticipated all the way around," said Evercore Partners analyst Alan Gould.
Media network revenue, which includes both ESPN and ABC, grew 11 percent to $4.6 billion, with operating profit surging 47 percent to $1.1 billion. Factoring out the addition of the Rose Bowl and Fiesta Bowl to ESPN, ad revenue at ESPN grew 27 percent.
Gould said the ad growth was huge.
"What we have here is a multiyear trend of auto advertising reverting to its normal level of spending, which I think should give a nice tailwind to TV advertising in general and probably sports advertising specifically," he said.
Parks and resorts revenue grew 8 percent to $2.9 billion, with operating income up 25 percent to $468 million. The company said guest spending and hotel occupancy were higher at its domestic parks, with attendance up 2 percent despite stormy and rainy weather in the U.S. The boost in parks earnings, thanks partly to higher average ticket prices, and more spending on food and merchandise came even with higher costs due to the launch of the Disney Dream cruise ship in January.
Movie studio revenue was flat at $1.9 billion but operating income jumped 54 percent to $375 million, led by the strong performance of "Toy Story 3," which grossed more than $1 billion in theaters worldwide after its June release and came out on home video in November. It also had lower write-downs on money-losing movies.
Consumer products revenue grew 24 percent to $922 million, with operating income up 28 percent at $312 million. Interactive media revenue grew 58 percent to $349 million, while the loss expanded to $13 million from $10 million.
Shares of Disney, which is based in Burbank, Calif., rose $1.42, or 3.5 percent, to $42.60 in extended trading after the release of results Tuesday. Earlier, it closed up 24 cents at $41.18 in the regular session.
- Walt Disney Co.