Disney Profit & Revenue Up

BURBANK: The Walt Disney Company saw its revenues increase 7 percent in the fiscal second quarter, with strong performances at the cable networks and consumer products businesses offsetting lackluster results from its movie studio.

Revenues for the quarter ended March 28 totaled $12.5 billion. Disney reported a profit of $2.1 billion, up 10 percent on the prior year.

Media Networks revenues for the quarter increased 13 percent to $5.8 billion and segment operating income decreased 2 percent to $2.1 billion. Operating income at Cable Networks decreased 9 percent to $1.8 billion for the quarter, due to a decrease at ESPN. Operating results at the Disney Channels and ABC Family were essentially flat, as the impact of higher contractual rates for affiliate fees in the current quarter was offset by the benefit in the prior-year quarter of a settlement of an affiliate contract dispute. Operating income at Broadcasting increased 90 percent to $302 million for the quarter, due to growth in affiliate fees, higher program sales and an increase in advertising revenues. These gains were partially offset by higher marketing costs for the launch of new series.

Parks and Resorts revenues for the quarter increased 6 percent to $3.8 billion and segment operating income increased 24 percent to $566 million. Operating income growth for the quarter was due to an increase at its domestic operations, partially offset by a decrease at its international operations.

Studio Entertainment revenues for the quarter were down 6 percent to $1.7 billion and segment operating income decreased 10 percent to $427 million. Lower operating income was driven by decreases in domestic home entertainment and international theatrical distribution, partially offset by a higher revenue share with the Consumer Products segment, reflecting performance of Frozen merchandise in the current quarter, and lower film-cost impairments. The segment faced a tough comparison to the prior-year quarter, which included the mega hit Frozen.

Consumer Products revenues for the quarter increased 10 percent to $971 million and segment operating income increased 32 percent to $362 million. Higher operating income was primarily due to an increase at the merchandise licensing business, thanks to the performance of merchandise based on Frozen and, to a lesser extent, The Avengers.

Interactive revenues for the quarter decreased 12 percent to $235 million and segment operating income increased by $12 million to $26 million.

“Our second quarter performance, marked by increased revenue, net income and EPS of $1.23, demonstrates the incredible ability of our strong brands and quality content to drive results,” said Robert A. Iger, chairman and chief executive officer of The Walt Disney Company. “The power of this winning combination is once again reflected in the phenomenal worldwide success of Marvel’s Avengers: Age of Ultron, which has opened at number one in every market so far.”