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November 14, 2009

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Disney surprises as earnings increase

WALT Disney Co posted a larger-than-expected rise in both quarterly profit and revenue, as strong results from its cable business and parks helped it overcome a disappointing stretch for its film studio.

Shares of Disney rose 3.3 percent after the company reported its earnings.

Disney earlier announced its finance chief, Tom Staggs, and the head of its parks division, Jay Rasulo, will soon swap jobs.

The management shift is part of a broader shake-up in the top ranks of Disney in recent months, and analysts said it could give Staggs the type of broader experience needed to someday succeed Chief Executive Bob Iger.

Even as Disney is shifting executives, it is performing far better than many expected at soldiering through big drops in spending by advertisers and consumers.

That is partly due to cost cutting - something Iger promised the company would continue to address.

But it also reflects relatively healthy sales.

In the most recent quarter revenue climbed 4.5 percent to US$9.87 billion, setting it apart from News Corp, Viacom Inc and Time Warner Inc, all of which posted sales declines.

What is more, Disney's revenue surpassed analyst expectations of US$9.28 billion.

"They crushed forecasts, based on very strong cable results and material outperformance on the parks," said David Bank, an analyst with RBC Capital Markets.


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