Minnie Mouse and Mickey Mouse characters wave to visitors at Tokyo Disneyland.… (Shizuo Kambayashi / Associated…)
Walt Disney Co., its bottom line dragged down by restructuring costs, reported a modest drop in its fiscal first-quarter profit.
The Burbank entertainment giant reported net income of $844 million, or 44 cents a share, for the quarter ended Jan. 2, compared with earnings of $845 million, or 45 cents, from the same period a year earlier. Revenue rose 1% to $9.7 billion.
Excluding one-time items, earnings of 47 cents a share beat analysts' average estimate of 38 cents.
The company's flagship Media Networks group, which includes the ABC broadcast network and cable channels ESPN and Disney Channel, posted an 11% rise in operating income for the quarter to $724 million from $655 million a year earlier. Revenue rose to $4.2 billion from $3.9 billion.
Analysts had been expecting modest first-quarter results for Disney's television group. However, worldwide growth of the Disney Channel and higher affiliate and advertising fees at ESPN helped drive a 5% gain in operating income for the cable networks, which rose to $544 million for the quarter, up from $517 million a year earlier.
The broadcasting group, which includes ABC and local TV stations, posted a 30% jump in operating income to $180 million, up from $138 million a year earlier. The previous year's results included a bad-debt charge associated with the bankruptcy of Tribune Co., owner of the Los Angeles Times.
Theme parks reported a 2% drop in operating income to $375 million, from $382 million in the same quarter last year. Revenue remained essentially flat at $2.7 billion. The domestic parks saw a boost in attendance, benefiting in part from a shift of the New Year's holiday from the fiscal second quarter to the first. But attendance was off at Disneyland Paris.
Chief Financial Officer Jay Rasulo said Disney planned to wean consumers from the park promotions it used during the height of the recession.
"It's not crystal clear looking forward what the best tactics will be to eventually make our way out of discounting . . . but we will see in the coming quarters," said Rasulo, who until January headed parks and resorts. "It probably won't be flipping the switch off. It will be a gradual buildup out of it."
The film studio staged a turnaround, reporting a 30% boost in operating income to $243 million, from $187 million a year earlier. Revenue was essentially flat at $1.9 billion. This reflected strong home entertainment sales of the Disney/Pixar Animation film "Up" -- a best-picture Oscar nominee -- and the comedy "The Proposal."
"Our movie studio, under its new leadership, is focused on improving its creative performance through high-quality branded films [from] Disney, Pixar and Marvel," said Disney Chief Executive Robert A. Iger. "The studio has also restructured its organization to produce, market and distribute movies more efficiently in light of the challenges that the movie business is facing."
The consumer products unit reported an 8% drop in operating income to $243 million, compared with $265 million a year earlier. Revenue fell 3% to $746 million, in part because of weaker sales of "High School Musical" and "Hannah Montana" merchandise.
The Interactive Media group saw a modest improvement, as it cut its losses to $10 million for the quarter compared with $45 million a year earlier. Sales decreased 29% to $221 million because of lower sales of video games and fewer titles released. Disney Online, however, saw subscription gains at its Club Penguin virtual world.