Should Disney Thank Oz Or the Economy For These Results?
A steadying economy has helped raise attendance at The Walt Disney Company’s (NYSE:DIS) theme parks and increased revenues, pushing the giant media conglomerate’s second-quarter results above analysts expectations.
Analysts polled by Thomson Reuters had expected the company to post earnings of 77 cents per share on revenue of $10.49. However, excluding certain items, Disney’s earnings came in at 79 cents per share, a 36 percent increase from the 58 cents reported in the year-ago quarter, while revenue soared 10 percent to $10.55 billion from $9.63 a year ago. The company’s net income was particularly strong, jumping 32 percent, year over year, to 1.51 billion.
Growth in the company’s three major businesses contributed significantly to the growth; its media networks, rose 6 percent to $4.96 billion from a year earlier with help from ESPN, its parks business rose 14 percent to $3.3 billion, and its studio business increased 13 percent increase to $1.34 billion.
“Our results reflect our successful strategy, the strength of our brands and the value of our high-quality creative content, all of which continue to drive long-term growth and shareholder value,” said Chairman and Chief Executive Officer Robert A. Iger in the company’s earnings press release. To CNBC he added, “Obviously, our parks and resorts had a great quarter that was helped a lot by some of our new investments notably at Disney Land and in Florida but also our new cruise ship and investments in Hong Kong.”
But new releases from its studio have also done very well. Iron Man 3, which hit U.S. theaters May 3, has already pulled in $711 million globally, a positive sign for the company’s next quarterly results. “Not only does it validate a strategy of big franchise films that we leverage across our businesses but it bodes very well for Marvel,” Iger said, adding that he hopes “Iron Man” will be back once more. The success of of the company’s “Oz The Great And Powerful,” benefited its studio business in the second quarter as well.
When asked about the advertising market, which affects Disney’s media networks business, Iger said, “We are reasonably bullish about the prospects for advertising for the rest of the year.”
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