Disney’s profit up slightly on networks, theme parks performance
Walt Disney Co. reported a small increase in net income for its fiscal third quarter, lifted by the performance of its media networks and theme parks, the Los Angeles Times reported.
But gains in those areas were blunted by the performance of Disney’s movie studio, which posted a 36% decline in operating income from a year earlier -- mostly because of weaker box-office results and marketing costs associated with “The Lone Ranger.”
Disney Chief Financial Officer Jay Rasulo said on a conference call with analysts that the company expects to lose $160 million to $190 million on “The Lone Ranger” -- results that would be reflected in its fourth-quarter earnings.
The Burbank company posted net income of $1.85 billion for the quarter that ended June 29, up 1% from a year earlier. Revenue rose 4% to $11.58 billion.
Disney, the world’s largest entertainment and media company, posted per-share earnings of $1.01 -- the same as a year earlier.
“We are pleased with the results we delivered in the third quarter,” Robert A. Iger, Disney’s chairman and chief executive, said in a statement. “We are confident that our strategy of creating high-quality branded content positions us well for the future.”
Shares of Disney rose $1.03 on Tuesday to close at $67.05, not far from an all-time high of $67.89 set May 16. The stock rose in after-hours trading before falling below its closing price.
Disney’s Media Networks Group, which includes ABC and ESPN, posted operating income of $2.3 billion, up 8%. Revenue rose 5% to $5.35 billion. Although its broadcast division saw operating income fall 20% to $213 million -- due in part to higher prime-time programming costs and decreased advertising revenue -- the operating income of the company’s cable networks was up 12% to $2.09 billion.
Disney partly attributed the gain in the cable business to increased affiliate and advertising revenue for ESPN.
The company’s movie studio had a weak quarter, posting operating income of $112 million, down 36% from a year earlier. Revenue was down 2% to $1.59 billion. Disney attributed the decline to lower box-office receipts.
The results also reflected marketing costs of “The Lone Ranger,” which was released after the third quarter and disappointed at the box office. The film, released in early July, had a production budget of at least $225 million and cost tens of millions of dollars more to market, but has taken in $176 million worldwide, according to Box Office Mojo.
Daniel Miller, Los Angeles Times