Disney earnings up in fiscal Q3
Film unit operating income down 49%
By Susanne Ault -- Video Business, 7/30/2008
JULY 30 | Walt Disney Co. delivered fiscal third-quarter earnings growth, despite its studio division hurting from the performance of The Chronicles of Narnia: Prince Caspian.
Disney recorded $1.3 billion in net income for the three months ended June 28. That marks about a 9% jump from the comparable frame in 2007.
Revenue hiked 2% to $9.2 billion.
In the middle of a slowing economy, Disney management told analysts on a Wednesday conference call that they were especially pleased with their gains, made mostly within the company's theme parks and cable networks divisions.
Disney’s film unit suffered mostly due to tough comparisons between the period’s lukewarm theatrical Prince Caspian and last year’s fiscal third-quarter blockbuster Pirates of the Caribbean: At World’s End. Operating income for Disney's film unit, which encompasses home entertainment, fell 49% to $97 million.
However, Robert Iger, the studio’s president and CEO, predicted Disney’s film results will soon rebound with Wall-E.
“Wall-E is a big hit and has nearly made $200 million at the box office,” said Iger. “This is the best reviewed movie of the year and will contribute to value over time as one of our classic films.”
Additionally, Iger noted promise with its early established digital presence. Disney has long supported online iTunes film download sales before most other studios hopped on board. To date, Disney has sold 5 million movies on iTunes, according to Iger.
“In a world where more and more people are migrating online, the Disney company is served well by having a strong [Web] presence,” said Iger. “That presence has created benefits [for] the bottom line.”
He also highlighted the building attraction to the studio’s Disney.com Web site, which corralled a record 32 million unique visitors in June.
“We aren’t immune to the challenging economy,” he said. “But we have a pretty good hand in a very tough game. We are watchful and will take steps necessary to keep marketing position strong.”
Elsewhere at Disney, cable network operating income jumped 14% to $1.2 billion, driven largely by the success of ESPN and NBA sports coverage. Theme park operating income jumped 3% to $641 million, due mostly to rising attendance and consumer spending at Disneyland Resort Paris.
