Disney’s net income rises 30% in quarter
Walt Disney Co. reported strong fourth-quarter earnings, buoyed by gains at Disney Channel and ESPN and at the Burbank company’s theme parks.
The entertainment giant reported net income of $1.08 billion for the quarter ending Oct. 1, a jump of 30% compared with a year earlier. Revenue also rose 7% to $10.4 billion.
Disney achieved record revenue, net income and earnings per share for fiscal 2011. Net income for the year reached $5.26 billion on revenue of nearly $41 billion.
“Given the challenging economic environment this year, I’m particularly proud of our excellent management team, which has consistently delivered on our strategy of creating high-quality content, expanding our platforms and growing our iconic brands and assets worldwide,” Disney President and Chief Executive Robert A. Iger said on a call with media analysts Thursday.
Disney’s media networks group, which includes the ABC television network, its collection of local TV stations and its cable channels, continues to be a profit engine for the company. Media networks posted operating income of $1.4 billion, a gain of 20% from a year earlier.
The TV group’s results were driven by sales of Disney Channel programming and higher fees paid by cable and satellite distributors, as well advertising growth internationally.
ESPN, which set viewership records for the fourth consecutive year, also benefited from fee increases and ad growth. Even the struggling ABC network is gaining traction with new dramas, including its modern-day take on fairy tales, “Once Upon a Time,” and its comedy about suburban life, “Suburgatory.”
Disney’s parks and resorts saw a 33% surge in operating income, which rose to $421 million for the quarter. The improved results at the company’s domestic parks, Hong Kong Disneyland and Disneyland Paris helped to partially offset costs associated with the September opening of the new Aulani hotel and vacation resort in Hawaii.
Iger said the company is beginning to reap the rewards of five years of investments in Disney’s theme parks. In the coming year, the company will open “Carsland,” which is the centerpiece of its $1-billion overhaul of California Adventure in Anaheim and the opening of Fantasyland in the Magic Kingdom park in Orlando, Fla.
Walt Disney Studios reported operating income of $117 million in the fourth quarter, up 13% from a year earlier, even though revenue fell 8%.
The studio’s domestic movie ticket sales benefited from this fall’s 3-D re-release of the 17-year-old animated classic “The Lion King,” which grossed about $150 million in worldwide box office receipts, Iger said.
Pixar Animation Studio’s sequel, “Cars 2,” had $559 million in global ticket sales but compared unfavorably to the 2010 summer blockbuster “Toy Story 3.”
Iger said the “Cars” franchise continues to spur consumer product sales, noting that it has surpassed “Star Wars” and “Toy Story” in retail sales of movie-themed merchandise. The consumer products group reported operating income of $207 million for the quarter, up 13% from the same period a year ago.
The upcoming Thanksgiving release of “The Muppets” is expected to “rebuild another beloved franchise,” Iger said. He noted that the film cost “less than $50 million to produce” and illustrates Disney’s strategy of releasing a mix of expensive event films like Marvel Entertainment’s 2012 superhero picture “The Avengers” with lower-cost movies.
Disney’s long-struggling interactive group reported a 19% gain in revenue, which rose to $223 million. Operating losses for the group fell to $94 million, compared with $104 million in the same period last year.
Iger said the interactive unit plans to introduce eight social networking games in the coming year, taking advantage of established Disney and Marvel brands, as well as creating original characters.
The chief executive expects the group to post a profit in 2013.
