Disney finishes 2010 strongly
A healthier media advertising market and greater theme-park traffic drove Burbank-based Walt Disney Co. to increased revenue and profits in the last three months of 2010 compared with a year earlier.
The first quarter of Disney’s 2011 fiscal year brought a 10% increase in revenue to $10.7 billion, up from $9.7 billion during the same period last year, the company reported Tuesday. Profits soared by 40% to $2.2 billion, versus $1.57 billion a year earlier.
Cable and broadcast networks are by far the biggest source of revenue for the company, which owns ESPN, the Disney Channel, ABC and ABC Lifetime. That part of the company saw an 11% revenue gain to $4.65 billion, compared with $4.175 billion in the first quarter of 2010.
ESPN’s success with the collegiate Bowl Championship Series attracted viewers and revenue, though programming costs increased, the company reported.
Revenue from parks and resorts bumped up 8% to $2.87 billion, despite what Chief Executive Robert Iger called a “trifecta” of bad weather in December that hit Europe, Southern California and the East Coast.
Disneyland revenue was down slightly for the year, according to Chief Financial Officer Jay Rasulo.
Studio entertainment revenues were flat for the quarter at roughly $1.92 billion, though the profit margin was greater than in 2010 because of lower film cost write-downs and growth in DVD and Blu-Ray disc sales driven mostly by the home release of “Toy Story 3.”
The animated hit “Tangled,” a retelling of the Rapunzel fable, has generated nearly $500 million in global box office receipts and added another character to what Iger called “the popular court of Disney princesses.”
Characters from “Toy Story 3” also helped drive consumer products revenue from $746 million in the first quarter of 2010 to $922 million this year.
The company’s interactive media arm continued to lose money, despite strong sales of the games Epic Mickey and Toy Story 3. Rasulo attributed the trend to the continuing financial integration of Playdom Inc., a game-making company Disney acquired last year for more than $500 million.
Overall interactive revenues grew 58%, grossing $349 million, the company reported.
Rasulo struck a cautious note on future earnings, pointing out that Disney has no release planned for the next quarter that would match the 3-D hit “Alice in Wonderland,” released during the second quarter of 2010.
And though ABC isn’t winning the ratings war, Iger said the network wouldn’t respond with a high number of new pilots.
“It’s important to make the right decisions, and not just make a lot of product,” he said.