Net income at The Walt Disney Co. increased 27 percent in the second quarter, boosted by strong results from its film studio, advertising sales at ESPN and international sales of its TV shows, including “Desperate Housewives.”
Although revenue was essentially flat for the quarter, profits were helped by some cost cutting at the studio and an unexpected hit, the motorcycle road trip adventure “Wild Hogs” with John Travolta.
The media conglomerate, based in Burbank, said Tuesday its net income for the quarter ended March 31 was $931 million, or 44 cents per share, compared with $733 million, or 37 cents per share, in the same period a year ago.
Revenue grew slightly to $8.07 billion from $8.03 billion in the same period last year.
The company’s per share earnings easily beat estimates of 38 cents per share from analysts surveyed by Thomson Financial, although its revenue missed analysts’ expectations of $8.13 billion.
Looking ahead, Disney is betting on two upcoming films, “Pirates of the Caribbean: At World’s End,” the last in the wildly profitable trilogy, and “Ratatouille,” the latest film from Pixar Animation Studios.
Disney Chief Executive Robert Iger said Tuesday the company expects a strong advertising market for its fall shows on ABC. The annual ad selling session, called the “upfront,” starts later this month.
The company reported profit growth at all segments, including theme parks and consumer products.
“I’m pleased to report another excellent quarter, with double digit increases in earnings per share as well as operating income across all of our business segments,” Disney Chief Executive Robert Iger said in a statement.
Operating profit at Disney’s film studio increased 60 percent to $235 million in the quarter, despite a 13 percent drop in revenue to $1.6 billion.
The studio has cut staff and is releasing fewer films, concentrating on Disney-branded family fare, which has historically been more profitable.
The media networks division saw operating profit climb 21 percent, although revenue remained flat at $3.6 billion.
The profit came from higher fees paid by cable operators for ESPN, as well as strong sales around the world of ABC shows, including “Grey’s Anatomy.”
Disney CFO Thomas Staggs told analysts the company has achieved about half of the $1 billion in revenue projected from the syndication of its ABC shows over a five-year period.
The company’s theme park division, which operates 11 parks worldwide as well as the Disney cruise line and a vacation time share business, saw a 19 percent rise in operating profit to $254 million. Revenue increased 9 percent to $2.446 billion.
Attendance grew at the company’s domestic parks in Florida and California as well as at the Disneyland resort in France. Problems still remain at Disney’s newest park in Hong Kong, however.
“We view Hong Kong as a valuable asset,” Staggs told analysts during a conference call.
The consumer products unit, which licenses the brand to toy and clothing makers, contributed $125 million to operating profit, a 20 percent hike, on revenue of $516 million.
Disney shares rose 49 cents, or 1.4 percent, to $36.17 on Tuesday.