Disney Posts Strong Return Cross-Business, Cable Revs Up 7%

Walt Disney posted strong revenue and advertising results for most of its businesses for its third-quarter fiscal period -- all amid a strong rebound in its stock price of 5% on Tuesday.

Disney, one of the companies in the Dow Jones Industrial Index, was part of a decline on Monday that witnessed the Index sink 5.6% or over 630 points. Disney's stock fell 6.1% on the day to $33.03. On Tuesday, its stock closed at $34.70.

For its fiscal third-quarter 2011 results, Disney's media networks grew 5% to $4.9 billion. Cable networks' revenue was up 7% to $3.5 billion, with its broadcasting business -- networks and stations -- essentially flat at $1.4 billion.

ESPN, Disney's big cable network, took in more affiliate revenues in the period, but advertising revenue at the big sports network was just about the same -- given the absence of the FIFA World Cup and a game seven of the NBA Finals, which ESPN had sold in the third-quarter 2010 period.

ESPN, which runs the NBA Finals programming on the ABC network, also had lower ratings for this year's Miami Heat-Dallas Mavericks series.

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On the broadcasting side, the ABC network improved advertising revenues resulting from higher rates. This was partially offset by lower ratings. Key advertising 18-49 prime-time viewership dropped 9% this past season, which ended in late May. Ad revenue at ABC's owned television stations was lower due to less political advertising.

Lower costs helped the company's broadcasting division hike its operating income by 20% to $250 million. Disney says the ABC prime-time lineup, in particular, benefited from lower costs -- going to more hours of reality programming and less to original scripted programming. A cost savings was achieved with news and daytime programming.

Cable networks had some lower costs overall, which lifted operating income 10% to $1.8 billion. Some of this was from ESPN, reflecting the absence of the FIFA World Cup and the lower costs ESPN paid for its programming to air on the ABC Network. There was a decrease in operating income at ABC Family as a result of higher programming costs, but ABC Family posted higher advertising revenue.

Walt Disney's Parks and Resorts grew revenues 12% to $3.2 billion and operating income by 9% to $519 million. Increasing revenue results came from the company's big domestic parks and resorts, Disney Cruise Line, and Hong Kong Disneyland Resort. But revenues dropped at Disneyland Paris and Tokyo Disney Resort -- hurt by the March earthquake, which closed the park for two weeks.

Disney's in-flux studio entertainment business fell 1% in revenues to $1.6 billion, with net income sinking 60% to $47 million. Current titles "Cars 2" and "Thor" could not match the same level of business as "Toy Story 3" and "Iron Man 2" earned during the comparable period in 2010.

Consumer products revenues rose 13% higher to $685 million, and operating income increased 32% to $155 million. Interactive media revenue results climbed 27% to $251 million, and operating income decreased by $21 million to a loss of $86 million.

Overall, Disney revenues grew 7% to $10.7 billion, with net income up 11% to $1.5 billion.

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