Disney profit buoyed by theme parks
Walt Disney Co., the world’s largest entertainment company, said second-quarter earnings rose 21 per cent, beating analysts’ estimates as theme parks countered the sci-fi film “John Carter” that bombed in theaters.
Net income grew to $US1.14 billion, or 63 cents a share, from $US942 million, or 49 cents, a year ago, Burbank, California-based Disney said today in a statement. Excluding items, profit of 58 cents beat the 55-cent average of 28 estimates compiled by Bloomberg. Prior to “John Carter” they had seen 61 cents.
Profit in the theme-park division jumped 53 per cent. Investors are already looking past the $US200 million loss on “John Carter” for clues to the impact this quarter and beyond from the record-breaking opening of “Marvel’s The Avengers.” The Disney adventure film took in $US207.4 million in its U.S. theatrical debut last weekend.
“We have the ability to leverage what was a very fine film done by the filmmakers at Marvel into something much bigger,” Chairman and Chief Executive Officer Robert Iger said on CNBC after results came out.
Sales rose 6.1 per cent to $US9.63 billion in the period ended March 31, beating projections of $US9.56 billion. The company had a gain of 5 cents a share, reflecting a $US184 million noncash credit on its investment in UTV Software Communication Ltd. and $US38 million in impairment costs.
Disney rose 1.2 per cent to $US44.85 in extended trading, exceeding the all-time closing high of $US44.38 was set on March 26. The stock gained 1.1 per cent to $US44.30 at the close in New York and is up 18 per cent this year, ranking sixth in the 16- stock S&P 500 Media Index.
“Having something like ‘The Avengers’ though really goes a long way,” Rich Greenfield, an analyst with BTIG Research, said in an interview before results were announced. “These are things that you can leverage through the Disney channels. These are things you can leverage through the parks. These are things you can leverage on the broadcast network.”
Revenue soared 10 per cent at the namesake theme parks to $US2.9 billion, Disney said. Results were driven by gains in the U.S., Tokyo and Hong Kong. Revenue fell at Disneyland Paris, the company said. Growth in the U.S. reflected higher ticket prices and attendance, the company said.
Revenue from media networks, including ESPN and ABC, increased 8.6 per cent, while profit grew 13 per cent.
“The cable networks, principally ESPN, continue to be the growth engines for Disney,” said Paul Sweeney, senior analyst at Bloomberg Industries. “Investors have long wondered how long the ESPN growth story can continue. There is no evidence in these numbers to suggest a slowdown.”
The film studio recorded a loss of $US84 million in the quarter, reflecting failure of “John Carter” in theaters. Revenue declined 12 per cent to $US1.18 billion, Disney said.
Sales in consumer products increased 8 per cent, while earnings expanded 4 per cent. The interactive division’s loss narrowed to $US70 million from $US115 million as revenue increased 13 per cent, Disney said.