Walt Disney Co. income rises 22%

The Walt Disney Co. posted a 22% jump in net income for the second quarter ended March 29, buoyed by strong performance of its media networks, studio, parks and resorts divisions.

The Burbank-based theme park, television and movie company reported net income of $1.1 billion, or 58 cents a share, compared to $931 million, or 44 cents, for the same time a year ago, on a diluted basis. Revenue for the quarter ended March 31 rose more than 9%, from $8 billion to $8.7 billion a year ago.

Analysts expected Disney to beat the Thomson Reuters consensus earnings estimates of 51 cents a share due to better-than-anticipated performance by the theme parks and studio.

Investors have been concerned that the slowing economy would affect vacation travel, as it has in the past. But second-quarter revenue in the parks and resorts division was up 11% to $2.7 billion, in part because Easter this year occurred in March instead of April, which marks the start of the third fiscal quarter. This provided a favorable comparison to the year-ago period.

The weakening dollar versus foreign currencies gave a boost to international tourism – and Disney World near Orlando, Fla., is no exception. Orlando International Airport reported a 26% jump in the number of international passengers touching down in the city through February.

But international tourists account for only about 20% of volume at Disney World, and Berenstein Research senior analyst Michael Nathanson projects a deceleration in revenue at U.S. parks in the second half of the year because of slowing consumer spending.

“Theme park growth is sensitive to the overall economic growth in general,” Nathanson wrote in a recent analyst report. “And in particular, to the growth in consumer discretionary spending.”

Goldman Sachs analyst Ingrid Chung wrote that the impact of a recession can be delayed by one to two quarters because of advance travel bookings.

Analysts also voiced concern about the other segment of Disney’s business that’s vulnerable to economic slowdown: broadcasting. Revenue for the broadcast division dropped 2% from the year-ago quarter, to $1.5 billion from $1.52 billion, as any benefit the ABC network might have reaped from lower programming expenses from the writers strike were more than offset by declines in ratings and ad revenue. Operating income for broadcast increased 17% from a year ago to $223 million, led by the strong performance of ABC Studios productions in international markets.

The cable networks – the Disney Channel and ESPN – helped offset broadcast. Revenue rose 9% from a year ago to $2.1 billion, and profit was up 14% to $1.1 billion.

Disney Studios showed a healthy 18% growth in the second quarter to $1.8 billion, spurred by strong DVD sales. Operating income surged 61% to $377 billion. Bernstein estimated that sales of two direct-to-video releases, “Snow Buddies” and “101 Dalmatians,” were on a par with the direct-to-DVD releases from second quarter last year, but the studio logged stronger sales of the DVD versions of theatrical releases “The Game Plan” and “Enchanted.”

Consumer products grew by 10% to $551 million in the second quarter, although segment operating income dropped 14% from a year ago. But its margin is compressed because of increased investment at Disney Interactive Studios.

 dawn.chmielewski@latimes.com