Disney 2Q profit jumps by 32 per cent

Disney 2Q profit jumps by 32 per cent

MUMBAI: US media conglomerate Disney has reported a 32 per cent jump in profits for the second fiscal quarter. Net income was $1.51 billion.

Its media networks, film and theme parks businesses all contributed towards this happy state of affairs. Revenue for the quarter ending 30 March 2013 rose by 10 per cent to $10.55 billion. Diluted earnings per share (EPS) for the second quarter increased to $0.83 from $0.63 in the prior-year quarter. Diluted EPS for the six-months ended 30 March, 2013 was $1.60 compared to $1.43 in the prior-year period.

Disney chairman and CEO Robert A. Iger said, "With adjusted earnings per share up 36 per cent over last year, we?re obviously pleased with our second quarter. Our results reflect our successful strategy, the strength of our brands and the value of our high-quality creative content, all of which continue to drive long-term growth and shareholder value."

Operating income at Cable Networks increased by $224 million to $1.7 billion for the quarter due to growth at ESPN. Higher operating income at ESPN was due to increased affiliate revenues and, to a lesser extent, higher ad revenues, partially offset by increased programming and production costs.

Increased affiliate revenues at ESPN were primarily due to contractual rate increases, a reduction in revenue deferrals as a result of changes in provisions related to annual programming commitments in certain affiliate contracts and international subscriber growth. During the quarter ESPN deferred $120 million of revenue compared to $190 million in the prior-year quarter.

Growth in ESPN ad revenues was primarily due to an increase in units sold and higher rates, partially offset by lower ratings in certain programming. The increase in programming costs was driven by contractual rate increases for college sports.

Operating income at broadcasting decreased by $91 million to $138 million for the quarter due to higher primetime programming costs and a decrease in ad revenue at ABC, partially offset by an increase in ad revenue at the owned television stations. Higher primetime programming costs were driven by increased production cost write-offs and higher cost acquired programming.

The decrease in network ad revenue was primarily due to lower ratings, partially offset by higher rates and increased online advertising.

The revenues in their studio and entertainment division increased by 13 per cent to $1.3 billion. And segment operating income increased by $202 million to $118 million. Higher operating income for the quarter was driven by lower film impairments, due to the write-down on ?John Carter? in the prior year and an increase in worldwide theatrical distribution. Worldwide theatrical distribution results reflected the strong performance of ?Oz The Great And Powerful? and ?Wreck-it Ralph? in the current quarter compared to ?John Carter? in the prior-year quarter.

Parks and Resorts revenues for the quarter increased by 14 per cent to $3.3 billion and segment operating income increased 73 per cent to $383 million.

Results for the quarter were driven by increases in the US and, to a lesser extent, at its international operations. Results at both domestic and international parks and resorts reflected a favorable impact due to a shift in the timing of the New Year?s and Easter holidays relative to the company?s fiscal periods.

Consumer products revenues increased by 12 per cent to $763 million and segment operating income increased by 35 percent to $200 million. Higher operating income was primarily due to increases at merchandise licensing and at its retail business. The increase at merchandise licensing was driven by the performance of Disney Channel, Mickey and Minnie, and Marvel properties, partially offset by lower revenue from sales of Cars merchandise.

Merchandise licensing growth also benefited from a licensee audit settlement. At the retail business, higher operating income was driven by higher comparable store sales in the US and Japan and higher online sales in the US.

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