Southern California's two largest entertainment companies Thursday reported sharply higher earnings in their latest quarters, with Walt Disney Co. up 61% and MCA up 38% from a year ago.
Burbank-based Disney posted net income of $128.4 million on revenue of $819.4 million for its third quarter, compared to net income of $79.7 million on revenue of $647.9 million a year earlier.
MCA, parent of the Universal Studios complex, reported net income of $38.8 million for its second quarter on revenue of $611.4 million, compared to net income of $28.2 million on revenue of $522.7 million in the same quarter last year.
MCA's most dramatic gain in revenue occurred in television, where it reported $172.3 million, up from $97.6 million a year ago, primarily because it recognized revenue from the sale of "The A-Team" series to non-network TV stations.
MCA also reported an after-tax gain of $2.9 million from the sale of JWT Group stock by Quantum Media Inc., a company 50%-owned by MCA.
MCA's second-quarter interest expense rose to $13.3 million from $2 million a year ago, largely because of "significantly higher outstanding borrowings" associated with the acquisition of WWOR-TV in New Jersey, the company said.
Heavy Trading in Stock
Meanwhile, MCA's stock continued to trade heavily for the 10th consecutive day on the New York Stock Exchange, closing at $58.25, down $2.25 on a volume of 1.18 million shares. The heavy trading was triggered by the three-week hospitalization of MCA Chairman and Chief Executive Lew R. Wasserman, who is the company's largest shareholder. Traders have continued to speculate about the 74-year-old executive's plans for MCA.
Disney's stock rose $1.25 to $70.875 on the New York Stock Exchange on a volume of 492,300 shares. Operating income from Disney's theme parks and resorts rose 35% to $188.6 million for the quarter ended June 30, while filmed entertainment posted a 81% gain of $20.6 million.
Operating income for Disney's Arvida real estate unit declined 12% to $7.9 million during the quarter, although the unit has generated an operating income increase of 86% for the nine months ended June 30.
Disney has not yet reached a definitive agreement for the previously announced sale of Arvida to an affiliate of Chicago-based JMB Realty, Disney Vice President Erwin Okun said. The closing of the $400-million deal was initially scheduled for May 30.
Disney's general and administrative expenses rose about 18% to $18.4 million during the quarter, while MCA's corporate general administration expenses were $4.4 million, up 50%. Disney did not cite any specific film's contribution to its third-quarter improvement in filmed entertainment, but MCA said its improved theatrical results could be credited to "The Secret of My Success" and "Dragnet."
