MUMBAI: US media conglomerate Disney has reported a 12 per cent jump in net income to $1.4 billion for the first quarter ended 31 December as ESPN shows strong subscription growth.

Revenues increased marginally by one per cent to $10.7 billion.

Disney president, CEO Robert A. Iger said, ?We?re off to a good start in this fiscal year executing on our ongoing strategy, deriving greater value from our brands ? Disney, Pixar, Marvel, ESPN and ABC ? in the US and around the globe. We are confident that our commitment to creating and providing exceptional family entertainment on multiple platforms continues to position us to deliver long-term shareholder value.?

Operating income at Cable Networks increased $196 million to $967 million for the quarter due to growth at ESPN and, to a lesser extent, the worldwide Disney Channels. The increase at ESPN was driven by higher affiliate revenue reflecting contractual rate increases and a reduction in revenue deferrals related to annual programme commitments.

During the quarter, ESPN deferred $190 million of revenue compared to $266 million in the prior year quarter. The decrease was due to a change in the provisions related to annual programming commitments in an affiliate contract.

Ad revenues at ESPN were essentially flat as higher rates and units sold were offset by decreased ratings and a shift in the timing of the Rose Bowl, Fiesta Bowl and certain NBA games relative to the fiscal period end. Programming and production costs at ESPN were comparable to the prior-year quarter as the shift in the timing of college bowl and NBA games was offset by higher contractual rates for NFL and college football programming.

Higher operating income at the worldwide Disney Channels was due to increased ad and affiliate revenue, partially offset by higher programming and production costs. Higher advertising revenue was driven by higher units sold and improved rates internationally. Affiliate revenue growth reflected subscriber growth internationally and contractual rate increases domestically.

Operating income at the broadcasting division decreased $69 million to $226 million driven by lower political ad revenues at the television stations and higher marketing costs, partially offset by lower programming and production costs due to the absence of The Oprah Winfrey Show at the owned television stations. The increase in marketing costs was driven by an increase in the number of new series launches at the ABC Television Network.

Ad revenue at the ABC was essentially flat as higher ad rates were offset by decreased ratings and units sold.

Studio Entertainment revenues decreased by 16 per cent to $1.6 billion and segment operating income increased 10 per cent to $413 million. The revenue decline was driven by fewer Disney branded titles in wide theatrical release in the current quarter along with an adverse impact from the timing of title availabilities in television markets and lower DVD volumes. Higher operating income was primarily due to an increase in worldwide theatrical results and lower film cost write-downs, partially offset by decreases in television distribution and worldwide home entertainment results.

Improved worldwide theatrical results reflected the benefit of lower distribution and marketing costs and production cost amortisation which more than offset the revenue decline due to fewer Disney branded films in wide theatrical release. Key titles in the prior-year quarter included ?Tangled? and ?Tron: Legacy? while the current quarter included ?The Muppets?.

Lower results in television distribution were driven by the timing of title availabilities, relative to our fiscal period end, in international markets. The decrease in worldwide home entertainment was primarily due to a decline in unit sales, partially offset by improved net effective pricing driven by a higher Blu-ray sales mix. The decrease in unit sales reflected the strength of ?Toy Story 3?, ?Beauty and the Beast? Platinum Release, ?A Christmas Carol? and ?Sorcerer?s Apprentice? in the prior-year quarter compared to ?Cars 2?, ?The Lion King? Platinum Release, ?Pirates of the Caribbean: On Stranger Tides? and ?The Help? in the current quarter, as well as lower sales of catalogue titles.

Consumer Products operating income of $313 million for the quarter was comparable to the prior-year quarter while revenues increased by three per cent to $948 million. At the retail business, increased revenue was driven by new stores in the US and holiday season promotions. Retail sales were driven by ?Cars? and ?Tangled? merchandise in the current quarter compared to ?Toy Story? in the prior-year quarter. The revenue increase at retail was largely offset by higher operating costs associated with increased volume.

At merchandise licensing, operating income for the quarter was comparable to the prior-year quarter as the strength of ?Cars? merchandise was largely offset by lower performance of ?Toy Story? and ?Tangled? merchandise.

Interactive Media revenues for the quarter decreased 20 per cent to $279 million and segment operating results decreased by $15 million to a loss of $28 million. Lower operating results were driven by a decrease at our console game business partially offset by improved social game results, consistent with our ongoing shift from console games to social and other interactive platforms. Social game results were driven by lower acquisition accounting impacts which were adverse to the prior year quarter and improved title performance in the current quarter.

The decrease at the console game business was primarily due to fewer releases and the strength of Epic Mickey in the prior-year quarter. Titles in the current quarter included Disney Universe while the prior-year quarter included ?Toy Story 3? and ?Tron: Evolution? in addition to Epic Mickey.

Parks and Resorts revenues for the quarter increased by 10 per cent to $3.2 billion and segment operating income increased by 18 per cent to $553 million. Results for the quarter were driven by increases at our domestic parks and resorts and Disney Cruise Line. Higher operating income at the domestic parks and resorts was driven by increased guest spending and attendance, partially offset by increased costs.