Disney Reports Record Net for Quarter, Year : Theme Parks Offset Poor Box-Office Performances
Despite “disappointing” domestic box-office performances by its movies last summer, Walt Disney Productions reported Monday that it achieved record net profits in the fourth quarter and for the whole of fiscal 1985.
The Burbank-based entertainment firm said “a significant improvement” in its theme park operations was the primary reason for the favorable results.
Net income was $53.8 million for the quarter ended Sept. 30 and $173.5 million for the full year, the company reported. In last year’s fourth quarter, new management at Disney took massive write-downs that resulted in a $64-million net loss. Even with the write-downs, the company reported a net profit of $97.8 million for the 1984 full year.
Revenue rose 27% in the latest quarter to $590.5 million from $463.2 million in the fourth quarter last year. It was up 22% for the full year to $2 billion from $1.7 billion a year earlier.
A 58% jump in operating income was recorded in the fourth quarter for the entertainment and recreation division. The segment, which includes Disneyland in Anaheim and Walt Disney World in Florida, including the Epcot Center theme park, earned $102.6 million. By comparison, operating income was $64.9 million a year earlier. For the full year, operating profit in this division rose 38% to $266.4 million from $192.7 million.
The segment’s $102.6-million operating profit provided the lion’s share of Disney’s fourth-quarter operating income, which climbed 42% to $123.3 million from $86.8 million.
Erwin Okun, a Disney vice president, said management this year stopped giving out attendance figures for the theme parks because they were being given “too much attention.” He noted that other variables besides attendance contributed to their results.
He said that the recent improvements in park income could be traced in large measure to aggressive marketing methods at the direction of Chairman Michael D. Eisner and President Frank Wells. For example, promotion tours were expanded to more than 120 cities this year, Okun said. Another major factor was the 30th anniversary celebration at Disneyland, he said.
The filmed entertainment segment suffered a $9.4-million operating loss in the fourth quarter, compared to a $429,000 loss a year ago. The quarter took the brunt of the company’s ill-fated summer releases, “The Black Cauldron,” “Return to Oz” and “My Science Project.”
However, management credited the Disney Channel, which achieved a profit early in the second quarter after 20 months of operations, for at least part of a resounding increase in full-year operating income in the filmed entertainment division. Income rose to $33.6 million from $2.2 million in 1984. The division’s results also were aided by higher home-video sales and rentals and the company’s re-entry into the pay-television market.
Disney said its Florida-based Arvida real estate subsidiary contributed to the increase in operating income of the community development division in the full year. Income rose to $62.5 million from $2.2 million.