The Walt Disney Co. reports that its net income in the latest quarter rose… (Michel Spingler )
Higher attendance at its overseas theme parks and cruise lines as well as growth in the rates that cable and satellite companies pay to carry ESPN helped drive growth for Walt Disney Co. last quarter.
The Burbank media giant’s revenue increased 3% to $10.8 billion in the three-month period ended Sept. 29, its fiscal fourth quarter, while net income increased 11% to $2.3 billion.
The company behind Mickey Mouse, “Toy Story” and “The Avengers” managed that increase despite revenue declines in its movie and interactive businesses.
For the full fiscal year, Disney’s revenue grew 3% to $42.3 billion and net income rose 18% to $5.7 billion, both records for the company.
“It was a great year for Disney by any measure: creatively, financially and strategically,” said Chief Executive Bob Iger.
The news came just a week after Disney announced its surprise $4.05-billion agreement to acquire Lucasfilm, a deal that secured it the valuable rights to “Star Wars.” On a conference call with Wall Street analysts, Iger called “Star Wars” “the very definition of a franchise,” citing its long-running global popularity despite the lack of a big-screen sequel in the last seven years.
At Disney’s television unit, revenue increased 4% to $19.4 billion and operating income grew 8% to $6.6 billion. All of the improved performance came from its cable channels, while broadcaster ABC was flat amid lower ratings during the late summer and start of its fall season.
ESPN managed to improve its contribution despite what Disney Chief Financial Officer Jay Rasulo described as a “less robust marketplace during the Olympics and a less robust pick-up after the Olympics than we expected.”
The company also enjoyed a higher contribution from its 50% stake in A&E Television Networks.
Disney’s parks and resorts business enjoyed the highest revenue growth at the company, rising 9% to $3.4 billion. Operating income climbed 18% to $497 million.
The unit benefitted from the launch of a new cruise ship and increased attendance at its parks in Hong Kong and Paris. Attendance was down at Walt Disney World in Orlando, Fla., but up at Disneyland and California Adventure in Anaheim thanks to the new Cars Land attraction, resulting in an overall 3% jump in domestic attendance.
Walt Disney Co. has been investing heavily in its theme parks over the last few years, including not only a $1.1-billion upgrade of California Adventure but new attractions in Hong Kong, the construction of a park in Shanghai and an expansion of Fantasy Land at Walt Disney World.
Despite the blockbuster success of May’s “Avengers,” which came out on DVD in September, Disney’s movie studio reported a 4% drop in revenue to $1.4 billion and a 32% drop in operating income to $80 million for the quarter. Walt Disney Studios released fewer movies overall than during the same period last year, and the films “Frankenweenie” and “Finding Nemo 3-D” were both box-office disappointments.
Pixar’s animated “Brave” was profitable, Rasulo said, but suffered in comparison with last year’s “Cars 2.”
Consumer products revenue grew 8% to $883 million because of strong sales of “Spider-Man” and “Avengers” toys. Operating income for the business increased 29% to $267 million.
The struggling interactive division saw a 4% revenue drop to $191 million, though ongoing cost-cutting helped its operating loss improve 19% to $76 million. Iger said Disney’s social games business, made up primarily of acquired company Playdom, was improving. But there were no new releases for video game consoles.
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