The Walt Disney Company said on Tuesday that its earnings shot up 31 percent during its fiscal third quarter, driven by growth at its media networks — primarily ESPN — and its movie studio.
Disney reported earnings of 67 cents per share during the quarter, up from 51 cents last year. Overall, quarterly revenues were about $10 billion, up from $8.6 billion during the same period. And net income — $1.33 billion — grew 40 percent.
“We’re very pleased with our strong third quarter, in which we grew revenues substantially and improved profitability across the majority of our businesses,” Disney chief Bob Iger said in a statement accompanying the results. “Our performance underscores the value of sticking to a smart strategy even in tough times, of investing in the right people, and of focusing relentlessly on quality and innovation to drive growth.”
Disney said the strong results were helped by the $43 million sale of its "Power Rangers" franchise.Disney $675 million sale of Miramax last month did not factor into the fiscal quarter, which ended July 3.
Revenues at Disney’s media networks increased 19 percent (to $4.7 billion) while operating income jumped 43 percent (to $1.9 billion).
Operating income at its cable networks — $1.7 billion, a 50 percent increase — was partially offset by production costs associated with ESPN’s coverage of the 2010 World Cup in South Africa.
The media networks were the largest driver of earnings, driven primarily by ESPN and buoyed by the addition of two NBA Finals games. Ad revenue at ESPN was up 31 percent.
Overall advertising in the current quarter is on pace to finish up double digits, Disney chief financial officer Jay Rasulo told investors Tuesday.
At its broadcasting unit, operating income ($209 million) was virtually unchanged. Advertising revenues at ABC Television Network were flat, as Disney offset a decrease in sold inventory and lower ratings by charging higher rates.
Revenues at Disney’s film studio increased 30 percent (to $1.6 billion) and operating income swung to a profit ($123 million) from a $12 million loss last year. Disney attributed the upswing to strong worldwide receipts from “Toy Story 3,” “Alice in Wonderland” and “Iron Man 2,” which outpaced “Up,” “Hannah Montana: The Movie” and “The Proposal” from the prior year quarter.
Disney also saw an increase in domestic home entertainment revenues, driven mostly by the release of “Alice in Wonderland.”
The only segment of Disney’s business that did not turn a profit during the fiscal third quarter was interactive media (including video game sales at Disney Interactive Studios) which reported a $65 million loss – though it was better than the $75 million loss incurred last year.
The company noted that has incurred $36 million of restructuring charges during the current quarter, related to the closure of five ESPN Zones.
