Disney Profits Beat Wall Street Predictions
After two wild quarters — leaping in the first and missing big in the second — the Walt Disney Company returned to its calm and collected ways on Tuesday, reporting profit slightly above Wall Street’s predictions.
Disney, the world’s largest media company, said net income for its fiscal third quarter rose to $1.48 billion, or 77 cents a share. That compares with income of $1.3 billion, or 67 cents a share, in the year-ago quarter. Revenue climbed 7 percent, to $10.68 billion. Analysts had expected income of 73 cents a share.
But the big question for Disney centers on the coming months: if its sprawling theme parks in Florida and California are bellwethers for consumer confidence, as many investors believe, how are the gloomy financial markets and fears of a double-dip recession affecting bookings heading into the crucial holiday season? Robert A. Iger, Disney’s chief executive, was expected to address that question in a conference call with analysts late Tuesday afternoon. In May, when Mr. Iger last updated analysts on the company’s theme parks, he offered a mixed picture, noting that future bookings were down 2.5 percent but pricing was slightly up.
Price increases, which reflect an end to promotional packages offered during the height of the recession, helped drive operating income at the company’s parks up 9 percent, to $519 million, in the most recent quarter. Hong Kong Disneyland and the Disney Cruise Line also contributed to improved results, offset by Tokyo Disneyland, which continued to feel the impact of the March earthquake that hobbled Japan.
As usual, Disney’s overall results were powered by its Media Networks division, which includes assets like ESPN, Disney Channel, the ABC broadcast network and local TV stations. Operating income in that unit rose 11 percent, to $2.09 billion, largely due to higher carriage payments for ESPN from cable providers.
Like other media conglomerates, Disney’s television advertising revenue has rebounded, although ESPN’s ad sales in the quarter were flat as higher rates were offset by the absence of World Cup games. Lower programming costs benefited ABC, where ad sales increased.
Highlighting the difficult economics of the movie business, operating income at Walt Disney Studios fell 60 percent, to $49 million, despite hits like “Pirates of the Caribbean: On Stranger Tides” and “Thor.” In the year-earlier quarter, Disney ’s movie releases — “Toy Story 3” and “Iron Man 2” — were stronger ticket sellers; they were also cheaper to make and market.
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Price increases, which reflect an end to promotional packages offered during the height of the recession, helped drive operating income at the company's parks up 9 percent, to $519 million, in the most recent quarter. Hong Kong Disneyland and the
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