• by Wayne Friedman , August 7, 2012

Walt Disney Co. posted some strong third-quarter fiscal results -- driven in large part by its parks and resorts business unit. Advertising results at its TV networks offered more of a mixed picture.

Net income gained 24% to $1.8 billion with revenues climbing 4%, rising to $11.1 billion in Disney's third quarter.

Disney's media networks witnessed 3% higher revenue, rising to $5.1 billion -- with cable networks climbing 3% to $3.6 billion and broadcasting networks rising 3% to $1.5 billion.

Disney's big revenue generator, ESPN, experienced advertising revenue growth from higher rates, increased units sold and improved ratings -- resulting from a shift in the timing of NBA games because of the late start of the season from the NBA lockout. Disney executives say revenues grew in the "mid-teens" percentage during the period that ended in June.

But recent TV advertising business -- especially at ESPN and its other networks -- has been hurt. Jay Rasulo, senior executive vp and chief financial officer of Walt Disney Co., said: "Our business has been impacted by the Olympics."

In preparation for the disruption of NBC's Summer Olympics in terms of TV marketing and advertising to competing TV networks, Bob Iger, president and chief executive officer of Walt Disney, said: "ESPN sold deeper in the upfront." He added that ABC also sold well -- around 80% of its ad inventory at higher rates during its upfront process.

But for its current reporting period, Disney says its broadcasting business registered lower advertising revenues from lower ratings. This was offset by higher rates. Still, operating income at its broadcasting business climbed 7% or $18 million to $268 million.

ESPN had a lower operating income in the period because of a shift in the later recognition of affiliate revenues -- particularly the money coming from deals made with cable operator Comcast Corp. Overall operating income at its cable networks grew around 1% or $14 million to $1.9 billion.

Disney's big performer during the period was Parks & Resorts -- partly as a result of the company's relaunch of its Disney's California Adventure, as well as gains in Tokyo Disney Resort, Disney Cruise Line, and other domestic resorts. Revenue climbed 9% to $3.4 billion and net income was 21% higher to $630 million. Disney had better comparisons as a result of the loss of income in March 2011 due to the earthquake and tsunami in Japan.

The movie "The Avengers" was a main contributor to the increase in Disney operating income results. 

Disney's Studio Entertainment unit posted essentially flat revenues at $1.6 billion. Overall operating income at its studio business climbed to $313 million from $49 million in the fiscal third quarter of 2011. But Disney said there were continued lower revenues resulting from a decrease in worldwide home entertainment.

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