Walt Disney 2Q earnings climb 19 per cent

MUMBAI: Riding on the strong ratings success of ABC Network and cable channels shows coupled with the increased attendance at its theme parks, The Walt Disney Company‘s profits in the second quarter have risen by 19 per cent.

The company‘s net income rose to $733 million from $657 million. Sales advanced 2.5 per cent to $8.03 billion in the period ended 1 April. Diluted earnings per share (EPS) for the second quarter increased 19 per cent to $0.37, compared to $0.31 in the prior year quarter. For the six months period, diluted EPS increased 16 per cent to $0.74 compared to $0.64 in the prior year period.

"Disney‘s ongoing commitment to creative and operational excellence is evident in our strong second quarter results. At the same time, the strategic initiatives we pursued during the quarter help position us for future creative success, new opportunities to reach consumers with our products, and long term value creation for our shareholders," said the Walt Disney Company president and CEO Robert A Iger.

The company‘s Media Networks revenues for the quarter increased 18 per cent to $3.6 billion and segment operating income increased 20 per cent to $969 million driven by strong performance at broadcasting.

The operating income at Cable Networks increased $41 million to $ 809 million for the quarter primarily due to growth at ESPN, which was driven by higher affiliate revenues from increased contractual rates. This increase was partially offset by higher revenue deferrals at ESPN, investments in ESPN branded mobile phone service, increased programming and production expenses and higher administrative costs at ESPN. ABC‘s hit dramas such as Desperate Housewives and Grey‘s Anatomy also help boost the network‘s revenues.

Revenue deferrals at ESPN increased by $31 million versus the prior year quarter due to new programming commitments in an affiliate contract and higher affiliate rates. Revenue deferrals for the six month period increased $137 million as compared to the prior six month period. Cable Networks also experienced modest profit growth at the Disney Channel and ABC Family.


Operating income at broadcasting increased $122 million to $160 million for the quarter primarily due to improved performance at the ABC Television Network and Television Production and Distribution, partially offset by investments in new initiatives at the Internet Group.

The growth at ABC Television Network was due to increased primetime advertising revenues resulting from strong upfront sales and continued strength in ratings. Ad revenues also increased due to the Super Bowl and the timing of Bowl Championship Series games, although this increase was essentially offset by related programming and production expenses. The increase at television production and distribution was driven by higher third party license fees for Scrubs, as this series entered its fifth season of network television, and increased international sales of Touchstone Television dramas.

Parks and Resorts

Parks and Resorts revenues for the quarter increased seven per cent to $2.3 billion and segment operating income increased 17 per cent to $214 million. Operating income growth at the resorts was due to increased theme park attendance, higher hotel guest spending and occupancy and strong sales at Disney Vacation Club.

Studio Entertainment

Studio Entertainment revenues for the quarter decreased 22 per cent to $1.8 billion and segment operating income decreased 39 per cent to $ 147 million. This was mainly because the company‘s DVD releases have not sold well. "Lower segment operating income was due to a decline in worldwide home entertainment partially offset by increases in domestic theatrical motion pictures distribution and worldwide television distribution," an official statement said.

Consumer Products

Consumer products revenues for the quarter decreased three per cent to $451 million and the operating income decreased eight per cent to $104 million. The decrease in operating income was driven by lower results at Buena Vista Games and Merchandise Licensing.

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