ESPN helps Disney boost income 40%
By Ryan Nakashima |
August 12, 2010, Thursday
|
Print Edition
Print Edition
THE Walt Disney Co said net income for the latest quarter jumped 40 percent from a year ago thanks to a huge boost from ESPN and a turnaround at its movie studio because of "Toy Story 3."
Disney said on Tuesday that fiscal third-quarter net income was US$1.33 billion, or 67 US cents per share. That's up from US$954 million, or 51 US cents per share, a year ago.
Revenue rose 16 percent to US$10 billion, from US$8.6 billion.
Much of the 50 percent profit gain at its cable channels came from recognizing deferred revenue at ESPN earlier than expected, although that won't affect the yearly results. But advertising rates and the volume of sales at ESPN also increased.
Cable channels represent Disney's largest profit driver, and this quarter represented US$1.68 billion in segment operating profit, or about two-thirds of the total.
Ad revenue at ESPN was up 31 percent, thanks partly to carrying the World Cup, and most of the earlier soccer games in the tournament also fell in the quarter through July 3. Excluding the World Cup, ESPN ad revenue was still 17 percent higher than a year ago, besting its media company peers amid an ad market recovery.
"The 17 percent recurring growth in ESPN advertising in the quarter was the fastest amongst its peers," said Barclays Capital analyst Anthony DiClemente. "I think that's a big positive."
Higher ad rates at broadcast network ABC were offset by lower ratings; its profits were only 2 percent higher.
The studio posted a much-anticipated turnaround thanks not only to the Pixar animated franchise "Toy Story," but also "Alice in Wonderland." Disney's purchase of Marvel Entertainment last year also gave it an extra boost from the theatrical release of "Iron Man 2" in early May. Writedowns for a couple of movies, "Prince of Persia" and "Sorcerer's Apprentice," pushed costs up, but the unit reversed a loss.
Profits at its theme parks fell 8 percent because of higher costs and lower attendance domestically. This month, Disney raised ticket prices by 3.8 percent for an adult day pass at Walt Disney World in Orlando, Florida.
Disney said on Tuesday that fiscal third-quarter net income was US$1.33 billion, or 67 US cents per share. That's up from US$954 million, or 51 US cents per share, a year ago.
Revenue rose 16 percent to US$10 billion, from US$8.6 billion.
Much of the 50 percent profit gain at its cable channels came from recognizing deferred revenue at ESPN earlier than expected, although that won't affect the yearly results. But advertising rates and the volume of sales at ESPN also increased.
Cable channels represent Disney's largest profit driver, and this quarter represented US$1.68 billion in segment operating profit, or about two-thirds of the total.
Ad revenue at ESPN was up 31 percent, thanks partly to carrying the World Cup, and most of the earlier soccer games in the tournament also fell in the quarter through July 3. Excluding the World Cup, ESPN ad revenue was still 17 percent higher than a year ago, besting its media company peers amid an ad market recovery.
"The 17 percent recurring growth in ESPN advertising in the quarter was the fastest amongst its peers," said Barclays Capital analyst Anthony DiClemente. "I think that's a big positive."
Higher ad rates at broadcast network ABC were offset by lower ratings; its profits were only 2 percent higher.
The studio posted a much-anticipated turnaround thanks not only to the Pixar animated franchise "Toy Story," but also "Alice in Wonderland." Disney's purchase of Marvel Entertainment last year also gave it an extra boost from the theatrical release of "Iron Man 2" in early May. Writedowns for a couple of movies, "Prince of Persia" and "Sorcerer's Apprentice," pushed costs up, but the unit reversed a loss.
Profits at its theme parks fell 8 percent because of higher costs and lower attendance domestically. This month, Disney raised ticket prices by 3.8 percent for an adult day pass at Walt Disney World in Orlando, Florida.
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