Disney Rides Hit Movies to Record Earnings Per Share

Disney CEO Bob Iger

UPDATED: Operating income at the conglomerate's film studio more than doubles to $411 million as "Frozen" outperforms internationally and in home entertainment.

Walt Disney reported Tuesday that it earned $1.28 per share in the most recent quarter on $12.46 billion revenue, besting the expectations of analysts on both the top line and bottom line as the conglomerate's film studio rode a wave of solid hits, including Maleficent and Captain America: The Winter Soldier.

Wall Street analysts had predicted Disney would post earnings-per-share of $1.16 on revenue of about $12.2 billion in its fiscal third quarter.

Disney said its earnings per share are a record for any quarter in the company's history. By that metric, the first three quarters of the fiscal year have already set a full-year record.

Disney's film unit has had remarkable success in an overall disappointing year for the box office. Frozen, released late last year, has been generating revenue for more than eight months and its $1.27 billion worldwide makes it the most popular animated movie of all time. Last week, Guardians of the Galaxy opened to $94 million domestically and $66 million internationally, easily beating expectations.

Disney said Tuesday its studio revenue rose 14 percent to $1.8 billion while that unit's operating income more than doubled to $411 million, with home entertainment for Frozen chipping in significantly, along with box office for Maleficent and the latest Captain America film.

"We're extremely pleased with these results and we are also thrilled with the spectacular performance of Guardians of the Galaxy, which holds great promise as a new franchise for our company and once again reinforces the tremendous value of Marvel," Disney CEO Bob Iger said Tuesday.

Disney Animation has Big Hero 6 scheduled for release in November and its Pixar unit has Inside Out and The Good Dinosaur coming next year. Plus, its Lucasfilm acquisition has Star Wars: Episode VII set for December of next year.

During a conference call with analysts Tuesday, Iger called footage from the upcoming Star Wars movie "spectacular" and worthy of "fan frenzy."

Iger also said that the film studio should be a "significant driver" of profit for the next five years given its "incredibly rich" pipeline of movies. "You're going to see some great results from the studio," he said.

Disney shares fell 1 percent during the regular session on Tuesday and are up 13 percent so far this year, well ahead of the 4 percent gain notched by the S&P 500. Disney shares were up as much as 2 percent after the closing bell as investors got their first look at quarterly earnings.

The company's media networks segment posted $5.5 billion in revenue, up 3 percent, though its operating income was flat at $2.3 billion. ESPN saw higher advertising rates due to FIFA World Cup soccer but the gain was partially offset by two fewer NBA finals games this quarter compared to the year-ago frame.

The parks and resorts segment showed an 8 percent rise in revenue to $4 billion and a 23 percent rise in operating income to $848 million.

Revenue at the consumer products segment was up 16 percent to $902 million and that unit's operating income rose 25 percent to $273 million.

The interactive unit showed a 45 percent increase in revenue to $266 million and $29 million in operating income, reversing a loss of $58 million a year earlier.