Disney's first-quarter revenue rises
Company's success due mostly to TV unit performanceDisney made it a trifecta, reporting better-than-expected quarterly financial results after News Corp. and Time Warner did similarly in recent days.
While cost-cutting at the film studio and good domestic home entertainment numbers helped, Disney owes its success mostly to television, a unit that CEO Bob Iger would like to wring more cash out of by way of ABC retransmission fees.
"It clearly would not be our preference to see that our signal was taken down and we'll do whatever we possibly can through negotiation to avoid that," he told analysts during a conference call Tuesday.
Jay Rasulo, on the call in his new role as CFO, singled out "Criminal Minds" as an overperformer for ABC, while Iger boasted of the Wednesday programming block of "The Middle," "Modern Family" and "Cougar Town."
Rasulo boasted that so far in the quarter the scatter market is 30% above upfront levels for ABC.
Iger also gave a shout-out to the iPad, the new product from Apple, run by Disney board member and top shareholder Steve Jobs. The tablet computing device that resembles a giant iPod Touch "could be a game changer in terms of enabling us to essentially create new forms of content," he said.
Disney, of course, is revamping its film studio under Rich Ross, and Iger promised it would emerge a more efficient machine after tinkering with the timing, pricing, marketing and distribution of its films. He said the quality of output will be noticed in 2011.
The notable titles this year, according to Iger, include "Alice in Wonderland," "Prince of Persia: The Sands of Time," "The Sorcerer's Apprentice," "Iron Man 2" from its new Marvel acquisition and "Tron Legacy."
Iger also confirmed the company is looking to sell Miramax, saying that making movies under that label "isn't a core strategy of ours."
Overall, Disney's net income in the fiscal first quarter ending Jan. 2 was $844 million, $1 million less than a year ago. Revenue rose 1% to $9.74 billion.
The media networks division led all others, as per usual, with a 7% increase in revenue to $4.18 billion and an 11% increase in operating income to $724 million.
Studio entertainment revenue fell 1% to $1.94 billion and operating income surged 30% to $243 million.
Parks and resorts revenue was flat at $2.66 billion and operating income was off 2% to $375 million.
Consumer products revenue dropped 3% to $746 million and operating income was off 8% to $243 million.
Interactive media revenue fell 29% to $221 million and operating income improved 78% to minus $10 million.
While home entertainment performed well for the studio due to lower distribution costs and marketing expenses, Iger cautioned of "continued pressure" owed to the economy, piracy and competition for the time of consumers.