Company reports 32% rise in second quarter profits on 10% gain in revenue.
Disney doesn’t have another “John Carter” on its hands as the success of “Oz the Great and Powerful” helped its studio division boost revenue by 13% and generate a profit during the second quarter. But Iron Mouse may be a more fitting nickname for Disney this month.
As Marvel’s “Iron Man 3” soars at the box office, the Walt Disney Co. wowed Wall Street on Tuesday when it reported a 32% rise in second quarter profits of $1.5 billion, on a 10% rise in revenue of $10.6 billion during the three months that ended March 30.
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“We’re obviously pleased with our second quarter,” said Robert Iger, chairman and CEO, the Walt Disney Co. “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.”
The results, which topped analysts’ expectations, were elevated mostly by strong ad growth at sports cabler ESPN, the success of “Oz the Great and Powerful,” and high attendance levels at its theme parks.
Overall revenue was up 6% at Disney’s media networks to nearly $5 billion, with cable up 9% to $3.5 billion and profits up 15% to $1.7 billion. ABC dragged down broadcast results, with profits plummeting 40% to $138 million as sales were off 2% to $1.5 billion.
Tourists flocked to Disney’s theme parks and resorts during the Easter holiday and Spring break vacation season, helping revenue rise 14% to $3.3 billion for Disney’s second-largest unit. Disney Cruise Line bookings were also mostly sold out during the quarter.
Attendance levels have evened out at Disney’s theme parks in California, after the company spent $1 billion to overhaul its California Adventure with new rides and attractions, including Cars Land. Iger revealed that before the revamp, 75% of guests visited Disneyland, while 25% crossed the plaza into California Adventure during a typical day. Now, it’s split their time 55% and 45% between the parks.
Disney’s studio division also was propped up during the quarter with “Oz the Great and Powerful,” which has gone on to earn $485 million since March 8. Its success, and strong homevideo sales of “Wreck-It Ralph,” helped the studio generate $1.3 billion in revenue (up 13%) and $118 million in profit, versus a loss of $84 million during the same frame a year ago when “John Carter” flopped.
“You’ll see more and more focus on big tentpole films and less on non-franchise, non-branded smaller films” moving forward, Iger said of pics produced by the studio.
He added that “when you consider that strategy and investment (in buying companies like Pixar, Marvel and “Star Wars”-parent Lucasfilm) you also have to consider the impact that investment has on the rest of the company — consumer products, interactive, opportunities on the theme park front. We feel good about the slate ahead.”
The consumer products division saw revenues increase 12% to $763 million, while profits rose 35% to $200 million, with merchandise based on Disney Channel’s shows, Mickey and Minnie Mouse, and Marvel’s properties selling particularly well.
Those figures are only expected to increase once the studio starts releasing new “Star Wars” films through Disney’s $4 billion acquisition of Lucasfilm, which closed during the second quarter.
Disney’s interactive division also narrowed its loss to $54 million, from a loss of $70 million, as revenue from the games and online group rose 8% to $194 million during the quarter. The release of new game “Disney Infinity,” in August, is expected to continue to boost the bottomline for the division, but positive results won’t be felt until fiscal 2014, which begins in September.
Disney’s stock, which already closed at record highs late last month at around $63, is now trading at a record $66.07, up $1.01 over Monday, a gain of 1.55%.