MUMBAI: The performance of ABC and ESPN have helped boost the third quarter results of US media conglomerate Disney.
Disney reported third quarter earnings of $0.41 cents a share. The company benefitted to ABC hits like Desperate Housewives, Lost, and Dancing with the Stars and a $27 million gain in its parks and resorts division thanks to the 50th anniversary activity built around its theme park.
Disney reported net income of $851 million. Revenue increased by three per cent to $7.72 billion in the quarter compared to $7.47 billion in the same quarter last year. The revenue from media networks increased by 16 per cent to $3.4 billion. Operating income increased by 48 per cent to $998 million. The increase at ESPN was a result of higher affiliate revenues as a result of an increase in contractual rates. ABC grew as a result of lower primetime programming costs, higher ad rates and better ratings.
The studio division proved to be a weak link for Disney, posting a 15 per cent decline in revenue to $1.5 billion. In terms of operating income it was a negative $34 million. High marketing costs, as well as declining home video sales and a lack of strong titles in the quarter, contributed to those declines. Disney COO Robert iger is hoping three new theatrical releases, including the CGI film Chicken Little and The Chronicles of Narnia will boost those numbers in the next quarter. He is also looking forward to the opening of Hong Kong Disneyland which will boost the growth of the theme park division.
The Disney Parks and Resorts unit's revenues for the quarter increased by seven per cent to $2.4 billion and segment operating income increased six per cent to $448 million. Disney CEO Michael Eisner has attributed the performance to a focus on long term actions whether in film, television, theme parks, consumer products.
Disney reported that revenue and segment operating income growth was due to improvements at Walt Disney World near Orlando and Disneyland Resorts in California, reflecting higher guest spending at both resorts, higher occupancy at Walt Disney World and higher attendance at Disneyland Resort. That was partially offset by increased costs and expenses at both resorts and $25 million of pre-opening costs at Hong Kong Disneyland.
Higher guest spending at Walt Disney World reflected ticket-price increases and fewer promotional offers, compared with the prior-year quarter. During the quarter, the company launched two new programs, "Disney's Magical Express" and "Extra Magic Hours," which are designed to increase occupancy at Walt Disney World hotels.
Higher costs and expenses reflected an increase in marketing due to the "Happiest Celebration on Earth" promotion, which celebrates the 50th anniversary of Disneyland and costs associated with new attractions and the new service programs.
Higher guest spending and attendance at Disneyland Resort were due to increased ticket prices and the 50th-anniversary celebration, respectively, the company said. Increased costs and expenses reflected higher marketing and sales costs due to the 50th anniversary celebration and higher volume related expenses.
