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Disney reports 12% net income bounce in its 2012 first quarter

Scene from Disney's upcoming film "John Carter"

 

 

 

 

 

 

 

A rebound at Walt Disney Co.'s domestic theme parks and strong performances by ESPN and the Disney Channel helped drive a 12% increase in the company's first-quarter net income compared with a year earlier.

The Burbank media giant reported that revenue for the quarter ended Dec. 31 was essentially flat at $10.8 billion, up 1% from a year earlier. Net income rose to nearly $1.5 billion for the period, up from $1.3 billion a year earlier. Earnings per share rose 18% to 80 cents, from 68 cents in the prior year's first quarter.

"We're off to a good start in this fiscal year," Disney President and Chief Executive Bob Iger said in a statement.

Before Disney reported its results, media analysts said they would be watching advertising trends at ESPN, the powerhouse cable sports network that Morgan Stanley estimates contributes approximately 8% of the company's revenue. 

ESPN's primetime ratings tumbled 15% in the December quarter, compared with a year earlier, according to TV ratings firm Nielsen. Viewership for "Monday Night Football" fell "due to an underwhelming lineup," according to Morgan Stanley.

The sports network's advertising revenue was essentially flat in the quarter, Disney reported. ESPN was negatively affected by the NBA player lockout, which delayed the start of the professional basketball season. The network carried just two games played in the quarter, versus 29 a year earlier, ESPN said. (Revenue resulting from the Rose and Fiesta college football bowl games will be reflected in the second quarter.)

Nonetheless, Disney's media networks group, which includes its cable channels as well as its ABC television network and locally owned stations, continued to fuel the company's bottom line. Revenue for the quarter rose 3% to $4.8 billion and segment operating income rose 12% to nearly $1.2 billion, compared with the same quarter a year earlier.

Morgan Stanley analyst Benjamin Swinburne had expected theme park margins to improve, as new attractions opened and the effect on Tokyo Disneyland royalties from last year's devastating earthquake and tsunami in Japan fades.

Disney said revenue for parks and resorts rose 10% to $3.2 billion in the quarter, compared with a year earlier, and that operating income increased 18% to $553 million. The company said visitors were spending more at its domestic parks. The Disney Cruise Line also reported higher operating income.  

The film studio's revenue fell 16% to $1.6 billion for the quarter, but operating income grew 10% to $413 million. Though the company scored with "The Muppets" and the late third quarter re-release of "The Lion King," and acted as distributor for movies including DreamWorks' "War Horse," the studio had fewer Disney-branded movies in theaters over the holidays, the company said. DVD sales fell.

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A scene from the upcoming Disney movie "John Carter," starring Willem Dafoe as Tars Tarkas, center, and Taylor Kitsch, as John Carter, at right. Credit: Disney

-- Dawn C. Chmielewski

 
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