The FINANCIAL — Walt Disney Co. reported a better-than-expected 7% rise in revenue for the first three months of the year as continued strength at its cable networks and consumer products businesses offset weakness at its movie studio, according to Nasdaq.
Shares of Disney, up 37% over the past year through May 4, rose 2.6% to $113.95 in premarket trading, Also helping results was a jump in profits from the company’s parks segment, boosted in part by higher ticket prices.
For years, Disney’s results have been powered by growth at its cable networks, particularly ESPN; however, in recent quarters, profits have been dinged by rising sports-right fees and lower advertising amid concerns about shifting viewing patterns by consumers.
In the latest quarter, Disney’s media networks–the company’s largest unit, which holds the ABC network along with Disney’s cable portfolio–saw revenue rise 13% and profits slipped 2%. Disney noted that operating income at its broadcasting increased 90% to $302 million because of growth in affiliate fees, higher program sales and an increase in advertising revenues.
Meanwhile, Disney’s year-ago quarter was boosted by continued enthusiasm for the blockbuster movie “Frozen.” There were no comparable hits in the reported quarter, although the live-action remake of the animated classic “Cinderella” in March was considered a success.
In the latest quarter, Disney’s movie studio saw its revenue fall 6% and profits drop 10%. The strong debut for ” Avengers: Age of Ultron,” which recently had the second-biggest opening ever, will help the current quarter that ends in June.
Overall for the three months ended March 28, the company’s fiscal second quarter, Disney reported a profit of $2.11 billion, or $1.23 a share, up from $1.92 billion, or $1.08 a share, a year earlier. Excluding certain items affecting comparability, per-share earnings rose to $1.23 from $1.11.
Revenue increased to $12.46 billion from $11.65 billion.
Analysts polled by Thomson Reuters expected per-share profit of $1.11 and revenue of $12.25 billion.
Revenue at Disney’s parks and resorts segment revenue increased 6%, while profits surged 24%, boosted by growth at its domestic parks, which was driven in part by price increases.
Consumer products sales increased 10% and profits jumped 32%, helped by sales of merchandise based on “Frozen” and, to a lesser extent, “The Avengers.”
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