Walt Disney Co.’s fiscal third-quarter earnings jumped 40 percent on deferred revenue at ESPN and hit movies including “Toy Story 3,” as the media giant and theme-park operator’s results beat analysts’ views.
Shares climbed 1.5 percent after-hours, to $35.75. The stock had risen 9.4 percent this year through the close, better than the broader market. In the most recent period, the film and TV production studio swung to a profit as revenue jumped 30 percent on the strong response to “Toy Story 3,” as well as “Alice in Wonderland” and “Iron Man 2.”
The division including television operations, Disney’s largest, posted a 19 percent gain in revenue and 43 percent increase in profit, driven by deferred revenue at ESPN and, to a lesser extent, the Disney Channel. Broadcasting, which includes ABC, posted modest 4 percent and 2 percent increases in revenue and earnings, respectively.
Media companies have been reporting improvement in advertising spending after the recession caused a slump in ad dollars, though its ABC television network has been struggling.
Disney’s theme parks also struggled in the most recent period. The business is largely at the mercy of consumer-spending trends, which were essentially flat in the three months through June, according to the Commerce Department. Many view the parks’ performance as an economic bellwether.
For the quarter ended July 3, the company posted a profit of $1.33 billion, or 67 cents a share, from $954 million, or 51 cents a share, a year earlier. Both periods included restructuring and impairment charges, while the most recent period also included a gain on the sale of the Power Rangers franchise, which canceled out the charges in the most recent results.
Revenue increased 16 percent, to $10 billion.
Analysts surveyed by Thomson Reuters predicted earnings of 58 cents on revenue on $9.38 billion.
Earnings in the parks and resorts division, its second biggest unit, which many view as an economic bellwether, fell 8 percent despite a 3 percent increase in revenue from higher costs and lower attendance and hotel occupancy. Guest spending was higher, however. Disney said unfavorable timing of the Easter holiday hurt attendance. However, results at the international parks improved, not only because of a real-estate sale but also on better guest spending, hotel occupancy and attendance at Disneyland Paris.
The company used discounts to boost attendance during the recession, but executives have said Disney has been reining then in since the beginning of the year, aiming for prices to return to normal next year.
