Disney Posts 30 Percent Boost in Quarterly Net Income as Theme Parks Soar

Disney Logo - H 2011

Disney Logo - H 2011

UPDATED: Studio revenue falls as "Cars 2" and "Thor" are no match for last year's "Toy Story 3" and "Iron Man 2."

The Walt Disney Co. on Thursday said it notched a 30 percent rise in net income to $1.25 billion on revenue that rose 7 percent to $10.43 billion in its fiscal fourth quarter, matching expectations on the top line.

On a per-share basis, Disney posted 58 cents in profit while Wall Street analysts had predicted 55 cents. In the same quarter a year ago, Disney reported a profit of 43 cents per share.

Disney shares rose 2.5 percent during the regular session Thursday to $34.64 and advanced another 2.9 percent in after-hours trading.

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Studio entertainment revenue sunk 8 percent to $1.5 billion while all other segments posted rising revenue on the quarter. The studio, though, recorded a respectable 13 percent rise in operating income to $117 million helped by the theatrical release of The Lion King in 3D.

During a conference call with analysts, CEO Bob Iger was confident that similar re-releases of other Disney animated classics – Beauty and the Beast, Finding Nemo, Monsters, Inc. and The Little Mermaid – would help the bottom line, though he doubted they’d match the success of Lion King.

Disney said strong comparisons were partially to blame for sinking studio revenue, as Cars 2, Tangled, Thor, Captain America and Pirates of the Caribbean: On Stranger Tides didn't measure up to last year's Toy Story 3, Alice in Wonderland, Iron Man 2 and Princess and the Frog.

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Iger said upcoming movies are “rich in potential,” namely: John Carter, Brave, War Horse and The Avengers.

With a 33 percent gain to $421 million, Disney's parks and resorts segment scored the biggest improvement in operating income due to the inclusion of the Disney Dream cruise ship and higher ticket prices at the parks, where customers also spent more on food and merchandise. Revenue in the segment grew 11 percent to $3.1 billion.

Disney’s biggest unit, media networks, scored a 9 percent increase in revenue to $4.8 billion and 20 percent growth in operating income to $1.5 billion. As per usual, ESPN and worldwide Disney Channels were a couple of primary drivers.

Concerning the latter, Iger said Disney’s animated TV show Phineas and Ferb “is well on its way to becoming a successful franchise,” including a feature film in the works.

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Cable outscored broadcast in terms of revenue growth, though the opposite was true for growth in operating income. Iger gave some of the credit for a 37 percent surge in operating income in broadcasting to the ABC shows The Middle, Modern Family, Suburgatory, Revenge and Once Upon a Time.

Iger said Disney is “getting paid nicely” by the likes of Netflix, Hulu and Apple for digital rights to its TV shows, though the revenue from those initiatives is still “modest” compared to traditional television.

“I really do think we’re as the beginning of the beginning” of the Internet-delivered TV business, Iger said.

Disney’s consumer products segment scored a 12 percent rise in revenue to $816 million and a 13 percent rise in operating income to $207 million. Interactive media posted a 19 percent rise in revenue to $223 million and a $94 million operating loss, which was a 10 percent improvement from the same quarter last year.

Disney's earnings wrapped up the season for the conglomerates. Before the opening bell on Thursday, Viacom reported better-than-expected quarterly financials, sending its stock 5 percent higher on the day.