Theme parks, nets offset Disney film losses
Robert Iger also touts music arm's 'success story'Apparently teenager Miley Cyrus, the Jonas Brothers and the gang from "High School Musical" are considered "older" acts around Disney.
No matter, because they're still generating boatloads of revenue, and their success serves as a magnet for younger musical talent, Disney CEO Robert Iger said Wednesday.
Iger's comments came while discussing Disney's quarterly earnings with Wall Street analysts, one of which was interested in the conglomerate's music business, which Iger said "has turned into quite a nice success story."
Disney, though, mixes its music results in with its movie studio numbers, and Iger declined Wednesday to separate them out.
Iger also offered some unsolicited advice to SAG, suggesting that a work stoppage would be "unpopular" while wondering aloud why SAG leadership should expect a better offer than other guilds are getting. He added that he did not foresee a "particularly damaging impact" on Disney's business because of stalled talks.
Disney's earnings topped Wall Street estimates, with television and theme parks picking up the slack from a weak studio performance, courtesy of the inability of "The Chronicles of Narnia: Prince Caspian" to compete with last year's "Pirates of the Caribbean: At World's End."
Disney earned $1.28 billion in the quarter, up from $1.18 billion the same quarter last year, on revenue that grew 2% to $9.24 billion.
Disney shares rose 2.4% to $31.67 on Wednesday but gave up the gains in the after-hours session.
Although the studio was the standout three months ago, this time it was the laggard, posting a 19% drop in revenue to $1.43 billion and a 49% plunge in operating income to $97 million.
But Iger focused on the positive, noting that "WALL-E" is "the best-reviewed movie of the year" and predicting a good response to "High School Musical 3: Senior Year," due in theaters Oct. 24, and "Bolt," featuring the voices of Cyrus and John Travolta, scheduled for release Nov. 26.
Disney's biggest sector, media networks, posted an 8% gain in revenue to $4.12 billion and 9% more operating income at $1.47 billion, with cable making up for a declining broadcasting business.
Cable, led by ESPN and the international Disney Channels, grew operating income by 14% to $1.2 billion, while broadcasting lost 11% to a positive $260 million.
Disney blamed weak broadcasting results on lower ad sales at the owned TV stations, though revenue at ABC was comparable to a year ago because of higher advertising and digital-media revenue offsetting lower ratings.
Parks and resorts, a closely watched segment because it might be vulnerable to a struggling economy and high gasoline prices, continued an impressive run. Revenue in the unit was up 5% to $3.04 billion, and operating income grew 3% to $641 million.
Disney's smallest unit, consumer products, grew revenue 20% to $642 million, though operating income fell 4% to $113 million, with the acquisition of the Disney Stores in North America contributing to the leap in revenue.
Disney blamed the lower operating income in that segment partly on lower sales of video games. Last year, Disney Interactive Studios had an "At World's End" game, while this year it had games based on "High School Musical" and "Prince Caspian," not to mention higher video game development costs.