×

Record Earnings: Disney Profits Surge 22% in Fiscal 2014

Successful film slate boosts overall sales 22% to $7.3 billion for Disney's studio

The Walt Disney Co. ended its fiscal year on a significant high note, reporting a record $48.8 billion in sales, up 8%, and 22% improvement in net income of $7.5 billion, handily besting analysts’ expectations.

Its fourth quarter revenue came in at $12.38 billion, up 7%, while profits rose 8% to $1.49 billion during the period, that ended Sept. 27.

“Our results for fiscal 2014 were the highest in the company’s history, marking our fourth consecutive year of record performance,” said Robert Iger, chairman and CEO, the Walt Disney Co. “We’re obviously very pleased with this achievement and believe it reflects the extraordinary quality of our content and our unique ability to leverage success across the company to create significant value, as well as our focus on embracing and adapting to emerging consumer trends and technology.”

Iger extended his contract during the fourth quarter to remain Disney’s chief through 2018, opting not to retire in 2016.

Gains during the most recent quarter came from most of Disney’s divisions.

Disney’s media networks group saw revenue for the quarter increase 5% to $5.2 billion, although operating income remained flat at $1.4 billion. For the year, sales rose 4% to $21.2 billion, while profits were up 7% to $7.3 billion.

ABC has been on the upswing this fall with help from shows like “Scandal,” “Black-ish,” “How to Get Away with Murder” and “Once Upon a Time,” although viewership is down 2% this seasons, and ratings have declined 5% over last year. Disney Channel is No. 1 among its core young audience, and should see a bump for Disney XD with “Star Wars Rebels.”

Operating income at ABC increased by $5 million to $163 million for the quarter, due to affiliate revenue growth and higher program sales, which helped offset higher primetime programming costs and lower advertising revenue.

Meanwhile, ESPN continues to be a major draw with NFL games. The sports cabler brokered a new deal with the National Basketball Assn. during the quarter to broadcast NBA games through the 2024-25 season with Time Warner.

Disney’s film studio also is enjoying a boon at the box office, with hits like “Guardians of the Galaxy” and “Maleficent” during the quarter helping the company enjoy a 70% surge at the U.S. box office, compared to the same year-ago frame. The studio released “The Lone Ranger” during the quarter last year, which struggled to lasso an audience.

The studio has generated nearly $3 billion at the worldwide box office this year. Next up is Walt Disney Animation Studios’ “Big Hero 6,” which is generating positive praise from critics.

Overall, the studio earned $1.8 billion during the fourth quarter, a gain of 18%, and $254 million in profits, compared to $108 million last year. Strong homevideo sales of “Frozen” was cited as a high point during the period. For the full fiscal year, sales were up 22% to $7.3 billion, with operating income coming in at $1.5 billion, compared to $661 million in fiscal 2013. “Frozen” generated a majority of the studio’s revenue during the year, according to Disney.

Nearly a year after its release, “Frozen” continues to do brisk business at retail, as well, with the company selling more than three million princess dresses tied to the blockbuster toon in North America this year. The film and Marvel’s movies have boosted Disney’s already strong consumer products business.

Consumer products sales rose 7% during the quarter to come in at around $1 billion, with profits increasing 9% to $379 million. Sales surged 12% to $3.98 billion, and profits 22% to $1.4 billion during the full year, thanks largely to “Frozen,” “Maleficent,” “Captain America: The Winter Soldier,” “Guardians” and Spider-Man merchandise.

Disney’s resorts business also saw a 5% uptick in attendance during its fourth quarter, as expansions to Fantasyland at Walt Disney World’s Magic Kingdom attracted throngs of guests, as did new additions to its properties around the world, including Hong Kong. The roll out of MyMagic+ has helped increase spending by guests in the parks.

For the fiscal year, the theme parks biz was up 7%, generating $15 billion, with profits gaining 20% to $2.7 billion. For the quarter, sales rose to $3.96 billion, helping operating income increase 20% to $687 million.

Disney Interactive also has found its groove through new mobile games like “Tsum Tsum,” and console based “Disney Infinity,” whose next iteration was released toward the end of the fourth quarter, adding popular characters from Marvel to the franchise.

For the fiscal year, the group posted a $116 million profit, compared to an $87 million loss last year, as revenue rose 22% to nearly $1.3 billion. During the fourth quarter, sales rose to $362 million, up from a loss of $9 million, boosting operating income 13% to $18 million.

The year is the first time Disney Interactive has posted a profit, a longterm goal of Iger’s.

Disney’s stock has ridden a wave of positive quarterly results, trading above $90 for the first time in August. Investors are also excited about the future slate coming from Walt Disney Studios, which should boost the revenue potential from the company’s other divisions, through the release of new “Star Wars” and Marvel movies.

The stock enjoyed a bump late last month when Marvel unveiled its slate of projects through 2019.

It closed at $91 on Wednesday, gaining 70 cents, and rose another $1 on Thursday to end the trading day at $92.

More Biz

  • Street scene Sunset Boulevard at night

    In Los Angeles, Rock and Roll Fights to Save the Sunset Strip

    On a recent Saturday evening on Sunset Boulevard, just beyond the nightly caravan of European sports cars and open-air tour buses that have seen better days, the famous Tower Records building was once again bathed in the familiar red and yellow paint job of the iconic music store that once occupied its stone-brick walls. Though [...]

  • Plume of black smoke rising from

    Universal Music Files Motion to Dismiss Lawsuit From Artists Claiming Fire Damage

    Universal Music Group filed a motion on Wednesday to dismiss a class-action lawsuit from attorneys representing Soundgarden, Hole, Steve Earle and the estates of Tupac and Tom Petty over master recordings reportedly destroyed in a 2008 fire, the extent of which was revealed last month in a New York Times article. UMG argues that the musicians cannot pursue a [...]

  • After Yet Another Rejection, What Could

    After Yet Another Rejection, What Could Be Next for Woodstock 50?

    In the wake of the Town of Vernon’s third rejection of Woodstock 50’s permit application to hold its music festival at a venue in the Upstate New York municipality, one may well wonder what the troubled event’s next move might be. In the hours after the latest rejection was announced, even the optimistic-bordering-on-unrealistic producers sounded [...]

  • US actor Kevin Spacey (C) is

    Kevin Spacey Sexual Assault Case Dropped in Nantucket

    Nantucket prosecutors have dropped a sexual assault case against actor Kevin Spacey, citing the “unavailability” of the complaining witness. Spacey had been accused of groping an 18-year-old busboy at the Club Car restaurant in July 2016. He was charged with indecent sexual assault, and a trial was set to be held in the fall. However, [...]

  • Plume of black smoke rising from

    Universal Music Updates Staff on Fire Damage in Internal Memo (Read)

    Ahead of an expected motion to dismiss the lawsuit filed last month by several artists over damage in the 2008 fire that destroyed hundreds of thousands of master recordings, according to the New York Times, the company’s chief archivist, Pat Kraus, issued a memo to the staff that has been obtained by Variety. While the [...]

  • CAA Signs Jay Shetty

    CAA Signs Jay Shetty

    CAA has signed award-winning host, storyteller, and viral content creator Jay Shetty for representation. Shetty’s videos have been viewed more than 4.5 billion times and he’s amassed more than 30 million followers across social media, becoming Facebook’s No. 1 creator on the platform with 24 million followers. After graduating university in the U.K., Shetty moved [...]

More From Our Brands

Access exclusive content