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Disney's Quarterly Profit Beats Expectations

Oz The Great and Powerful Williams Franco 2 - H 2013
Disney
"Oz the Great and Powerful"

UPDATED: CEO Bob Iger touts "Iron Man 3's" box office haul and upcoming films including "The Lone Ranger," but says ABC "could use a few more new hits."

The Walt Disney Co. posted $10.55 billion in revenue in the most recent quarter, up from $9.6 billion last year, and $1.6 billion in net income -- up from $1.2 billion a year ago.

On a per-share basis, Disney posted 79 cents profit, while analysts had expected 77 cents. Analysts expected $10.5 billion in revenue.

One stark improvement over last year was at the movie studio, where the science-fiction letdown John Carter led to a large write-down about this time last year.

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Without a similarly expensive flop this time around, studio revenue was up 13 percent to $1.34 billion, while operating income was $118 million, as opposed to an $84 million operating loss a year earlier.

Also getting credit for the vast improvement at the movie studio were strong showings from Oz the Great and Powerful and Wreck-It Ralph.

Revenue for Disney's media networks segment rose six percent to $4.96 billion and operating income was up eight percent to $1.86 billion. On the cable side, ESPN enjoyed increased affiliate revenue, but on the broadcast side higher programming costs and lower ratings at ABC hurt the bottom line.

Parks and recreation revenue increased 14 percent to $3.3 billion and operating income surged 73 percent to $383 million. Some of the increase was "due to a shift in the timing of the New Year's and Easter holidays relative to our fiscal periods," Disney said.

Consumer products revenue was up 12 percent to $763 million, and operating income was up 35 percent to $200 million. Interactive revenue climbed eight percent to $194 million, while an operating loss improved from $70 million last year to $54 million this time.

Disney shares were hovering near an all-time high prior to the conglomerate's financial report, which was released after the closing bell. The stock closed two percent higher on Tuesday to $66.07 and was up fractionally in the after-hours session.

During a conference call with analysts, CEO Bob Iger gushed over the $711 million global take for Iron Man 3 thus far, and he noted the soaring stock price.

Some upcoming films receiving shout-outs from Disney's chief were Monsters University, Finding Dory and The Lone Ranger. He said the animated Frozen will be "an excellent Christmas film."

Disney Junior, Iger said, is getting twice the audience of Nick Jr. and three times that of PBS Kids Sprout. But he lamented a "generally soft" TV stations business. He also said that ABC "could use a few more new hits."

After lots of boasting about Marvel, Iger insinuated that Disney might never get the rights to put Marvel superheroes at its Florida theme park, given that Universal's Islands of Adventure has rights to them there.

Iger said he feels "great" about high-profile acquisitions Pixar, Marvel and Lucasfilm, but also that he doesn't see other available properties that are comparable to those, so shareholders shouldn't expect big purchases any time soon. 

Of Lucasfilm, the most recent of Disney's blockbuster acquisitions, Iger said that it was "remarkable that it was even available to buy."

He said there's a list of properties that Disney is interested in, and Marvel and Lucasfilm were both on it. "That list is shorter today than it used to be," he said.