Disney’s Q1 Earnings Dip

BURBANK: The Walt Disney Company reported a 6-percent drop in its first-quarter earnings, due in part to the rising costs of acquiring sports rights for its ESPN division as well as a decline in operating income at the film studio.

For the quarter ended December 29, 2012, net income was down 6 percent to $1.38 billion. Revenue rose 5 percent to $11.34 billion. At the Media Networks segment, revenue increased 7 percent to $5.1 billion and operating income increased 2 percent to $1.2 billion. Operating income for its cable networks was down 2 percent to $952 million, with decreases at ESPN partially offset by growth at the domestic Disney Channels, ABC Family and A&E Television Networks. Operating income for broadcasting gained 16 percent to $262 million, led by increased ad revenues at ABC and owned TV stations and higher program sales, which were partially offset by higher prime-time network programming costs.

Parks and Resorts revenues for the quarter were up 7 percent to $3.4 billion and segment operating income gained 4 percent to $577 million. The increase at the domestic operations were offset by a decrease from international ones.

Studio Entertainment revenues dipped 5 percent to $1.5 billion; segment operating income fell 43 percent to $234 million. This was from decreases in home entertainment and theatrical distribution, offset by an increase in TV and SVOD distribution. Consumer Products was strong, as revenue increased 7 percent to $1 billion and segment operating income gained 11 percent to $346 million.

“After delivering another record year of growth in 2012, we’re off to a solid start in Fiscal 2013,” said Robert A. Iger, the chairman and CEO of The Walt Disney Company. “Our ongoing success is driven by our long-term strategy, the strength of our brands and businesses, and our high quality family entertainment.”