'Frozen,' 'Thor' Boost Disney Quarterly Earnings

1:23 PM PST 02/05/2014 by Paul Bond
Jay Maidment/Marvel
"Thor: The Dark World"

UPDATE: Disney shares were rising 3 percent after the closing bell once the conglomerate reported a record for fiscal first-quarter earnings.

Disney earned $1.03 per share in its fiscal first quarter on revenue of $12.31 billion, beating the expectations of analysts on both the top and bottom lines, thanks in no small part to a strong showing from the films Frozen and Thor: The Dark World.

Wall Street expected Disney to earn 92 cents per share on revenue of $12.25 billion. Disney shares rose 1 percent on Wednesday and are up about 33 percent over the past 12 months. During the after-hours session, they were up another 3 percent.

Disney said its results set a record for fiscal first-quarter earnings.

The conglomerate's studio entertainment segment saw a surge in revenue of 23 percent to $1.9 billion with operating income rising 75 percent to $409 million. Beyond Frozen and Thor, the studio benefited from better results from home entertainment.

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Disney's normally underperforming Interactive segment showed promising results, with operating income of $55 million compared with just $9 million in the same quarter a year ago. Revenue in the segment jumped 38 percent to $403 million. Disney attributed the success to Disney Infinity, a video game that incorporates the use of plastic action figures.

Disney Interactive has undergone layoffs since a restructuring in November, and on Wednesday Disney chief Bob Iger told analysts during a conference call that the unit is "moving off of some of the more traditional platforms into the mobile space. … That's a big move for us."

Iger said Disney Interactive -- when it comes to console games -- will do more licensing and less publishing. He also said "new iterations" of Disney Infinity are coming.

Media networks, Disney's largest segment, reported a 4 percent rise in revenue to $5.3 billion and operating income of $1.5 billion, a 20 percent improvement from a year ago. The better results were driven by cable, where operating income surged 34 percent, while broadcast was 32 percent lower than last year. Disney credited ESPN and A+E Television Networks for the rise in cable, and to a lesser extent improvement at domestic Disney Channels.

Parks and resorts revenue rose 6 percent to $3.6 billion, with operating income up 16 percent to $671 million. Revenue at consumer products rose 11 percent to $1.1 billion with operating income up 24 percent to $430 million.

During the conference call, Iger mostly praised the film studio and also credited Frozen, Star Wars and Disney Jr. for driving growth at consumer products.

Iger called Star Wars: Episode VII, due in December, 2015, "one of the biggest movies we've ever released," and he congratulated Frozen for surpassing The Lion King "to become the most successful Disney Animation movie of all time."

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