The Walt Disney Company has posted quarterly net income of
$1.14 billion for the second quarter ended 31 March, a 21
per cent increase from a profit of $942 million in the year-ago
disastrous performance of John Carter notwithstanding,
the companys revenue for the quarter rose to $9.6 billion,
a six per cent increase compared with the same quarter last
year, on the back of The Avengers, which shattered domestic
box office records with a $207.1 million opening weekend for
a global performance of more than $702 million to date.
18 per cent adjusted growth in earnings per share, we're pleased
with our second quarter performance. We're incredibly optimistic
about our future, given the strength of our core brands, Disney,
Pixar, Marvel, ESPN, and ABC, and our extraordinary ability
to grow franchises across our businesses, such as The Avengers,
which shattered domestic box office records with a $207.1
million opening weekend for a global performance of more than
$702 million to date, said Disney Chairman and CEO Robert
media networks revenues for the quarter increased nine per
cent to $4.7 billion and segment operating income increased
13 per cent to $1.7 billion.
Operating income at cable networks increased $143 million
to $1.5 billion for the quarter due to growth at ESPN and,
to a lesser extent, at the domestic Disney Channels.
increase at ESPN was driven by higher affiliate and advertising
revenue, partially offset by higher programming and production
costs. The increase in affiliate revenue was due to contractual
rate increases and a reduction in revenue deferrals related
to annual program commitments. During the quarter, ESPN deferred
$190 million of revenue compared to $262 million in the prior
decrease was due to a change in the provisions related to
annual programming commitments in an affiliate contract. Advertising
revenue growth was due to higher rates and a shift in the
timing of Rose Bowl, Fiesta Bowl and NBA games relative to
the fiscal period end. Higher programming and production costs
were driven by the shift in the timing of college bowl and
NBA games and higher contractual rates for college basketball
operating income at the domestic Disney Channels was primarily
due to increased affiliate revenue from contractual rate increases
and higher sales of Disney Channel programs.
income at broadcasting business increased $62 million to $229
million due to lower programming and production costs and
higher advertising revenue. Lower programming and production
costs were due to the absence of costs for The Oprah Winfrey.
advertising revenues were due to increased primetime rates
at the ABC Television Network, partially offset by a decrease
at the owned television stations.
and Resorts revenues for the quarter increased 10 per cent
to $2.9 billion and segment operating income increased 53
per cent to $222 million. Results for the quarter were driven
by increases at domestic parks and resorts, Tokyo Disney Resort
and Hong Kong Disneyland Resort, partially offset by a decrease
at Disneyland Paris.
operating income at domestic parks and resorts was driven
by increased guest spending and attendance, partially offset
by increased costs. Increased guest spending reflected higher
average ticket prices, daily hotel room rates and food, beverage
and merchandise spending. Higher costs were driven by labour
cost inflation, resort expansion and new guest offerings,
volume-related cost increases, and increased investments in
increase at Tokyo Disney Resort reflected the loss of income
in the prior-year quarter from the March 2011 earthquake and
tsunami in Japan, which resulted in a temporary suspension
of operations, and the collection of related business interruption
insurance proceeds in the current-year quarter. The increase
at Hong Kong Disneyland Resort was due to higher guest spending
and attendance. The decrease at Disneyland Paris was due to
lower attendance and labour cost inflation.
Entertainment revenues decreased 12 per cent to $1.2 billion
and segment operating income decreased $161 million to a loss
of $84 million.
decline in operating income was primarily due to lower worldwide
theatrical results reflecting the performance of John Carter
in the current quarter along with the related film cost write-down.
Other titles in the current quarter include The Muppets and
Beauty and the Beast 3D while the prior year included Tangled,
Tron: Legacy and Mars Needs Moms.
Products revenues increased 8 per cent to $679 million and
segment operating income increased 4 per cent to $148 million.
Higher operating income was primarily due to an increase at
Merchandise Licensing, partially offset by lower results at
the retail business.
increase at Merchandise Licensing was primarily due to higher
minimum guarantee shortfall recognition in the current quarter
and earned revenue growth driven by the performance of Minnie,
Mickey, The Avengers and Princess merchandise.
decrease at the retail business was due to a decline in our
North American business driven by decreased margins due to
Media revenues for the quarter increased 13 per cent to $179
million and segment operating results improved by $45 million
to a loss of $70 million. Operating results were driven by
an increase at the games business, reflecting improved results
from social and console games.
game results were driven by lower acquisition accounting impacts
which had a higher adverse impact on the prior-year quarter
and improved title performance in the current quarter.
console game results were primarily due to lower product development
costs, partially offset by a decline in console game sales,
which reflected fewer titles in release in the current year.
Lower product development costs reflected the ongoing shift
from console games to social and other interactive platforms.
February 2, 2012 the Company increased its percentage ownership
in UTV Software Communications Limited (UTV) from 50 per cent
to 93 per cent through a delisting process governed by Indian
law. In connection with the acquisition, the company recorded
a $184 million non-cash gain to adjust the book value of its
existing interest in UTV to the estimated fair value.