'Mars Needs Moms' Hurts Disney as Quarterly Profit Drops 1%
UPDATED: The poor performance of the animated film contributed to the profit fall, despite rising revenue.
The poor performance of Mars Needs Moms helped contribute to a 1 percent profit decrease at Disney in its fiscal second quarter, despite rising revenue, the company said Tuesday.
Disney reported net income of $942 million on revenue that grew 6% to $9.1 billion.
Its largest segment, media networks, was the standout performer, with operating income that grew 17 percent to $1.5 billion on revenue that was up 12 percent to $4.3 billion.
Its weak link was the film studio, which reported operating income that shrunk 65 percent to $77 million on revenue that was off 13 percent to $1.3 billion.
Beyond Mars Needs Moms, which took in $37 million worldwide on a $150 million budget, Disney blamed weakness at the studio on difficult comparisons. A year ago, after all, Alice in Wonderland was in worldwide theatrical release, and Toy Story and Toy Story 2 were selling well on DVD and Blu-ray disc.
The other three segments -- parks and resorts, consumer products and interactive media -- each saw some revenue growth. Parks and resorts, though, reported a 3 percent decline in operating income to $145 million, and interactive lost $115 million compared with a loss of $55 million a year ago.
Disney shares rose 2 percent ahead of its earnings report to $43.91 but were off as much as 3 percent in after-hours trading as Wall Street determined the results fell short of expectations.
Zacks Investment Research, in fact, said "the entertainment behemoth posted a horror flick on earnings."