Walt Disney Co. (DIS:US), the world’s largest entertainment company, said fiscal second-quarter profit rose 32 percent, beating analysts’ estimates as guests splurged at theme parks in California and Florida.
Net income grew to $1.51 billion, or 83 cents a share, from $1.14 billion, or 63 cents, a year earlier, Burbank, California-based Disney said yesterday in a statement (DIS:US). Excluding items, profit of 79 cents beat the 77-cent average of 27 analysts’ estimates compiled by Bloomberg.
New features at Disney parks, such as the Cars Land attraction based on Pixar movies, delivered 73 percent higher profit for the division and the fastest revenue growth for the company at 14 percent. Higher attendance and guest spending, along with the addition of the Disney Fantasy cruise ship, spurred the gains, the company said.
“The Disney machine is churning out the benefits which come from courageous capital investments in the difficult stretch from 2008 to 2011,” William W. Smead, chief executive officer of Smead Capital Management Inc., a shareholder in Seattle, said in an e-mail.
Operating profit at the namesake theme parks soared to $383 million, Disney said. Revenue totaled $3.3 billion. The company (DIS:US) has spent $9.45 billion expanding and improving its parks, resorts and other properties over the past three years, financial reports show. First-half outlays declined 47 percent to $1.12 billion, the company said.
Disney fell 1.3 percent to $65.23 at 9:52 a.m. in New York. The stock reached $66.07 yesterday, an all-time closing high. Before today, it had gained 33 percent this year, the second-best performer in the Dow Jones Industrial Average (INDU), which had increased 15 percent.
Disney’s film studio posted profit of $118 million, compared with an $84 million loss a year ago after writing down the theatrical flop “John Carter.” Revenue increased 13 percent to $1.34 billion.
Chief Executive Officer Robert Iger’s film unit led the industry with the top-grossing movie for the three months ended March 31, “Oz the Great and Powerful,” and is building momentum now with Marvel’s “Iron Man 3,” already at the top of the worldwide box office after just days in theaters.
“Iron Man 3” kicked off the summer movie season on May 3, registering $174.1 million in domestic weekend ticket sales, according to Hollywood.com Box-Office, a haul bested only by last year’s “Marvel’s The Avengers,” also from Disney.
Disney’s media (DIS:US) networks division, ABC, ESPN and the Disney channel, registered a 7.7 percent gain in profit to $1.86 billion as revenue increased 5.6 percent to $4.96 billion. ABC’s profit fell 40 percent while earnings from cable networks grew 15 percent.
In consumer products, profit rose 35 percent to $200 million on sales of Disney and Marvel branded merchandise that boosted divisional revenue 12 percent to $763 million.
Disney’s resorts in Orlando, Florida, and Anaheim, California, set attendance records in the quarter, Iger said yesterday on a conference call, benefiting from improvements at Fantasyland in Walt Disney World and at California Adventure. Attendance at the parks rose 8 percent in the quarter, while spending increased 10 percent.
“I don’t think there’s any other way to describe the results at parks and resorts than it was a tremendous quarter,” Iger said.
The parks should show more improvement in fiscal 2014 as Disney rolls out a new system to let tourists book rides and other attractions in advance, Chief Financial Officer Jay Rasulo said. That will let guests spend more time at Disney properties, and less at competitors’, Rasulo said.
“We get more time with them, we get a bigger share of their wallet,” Rasulo said.
The company’s ESPN unit also prospered in the quarter, Rasulo said on the call, with advertising up 4 percent and on pace to rise 10 percent in the current quarter.
“There’s probably more certainty as it relates to ESPN than almost any other business we’re in,” Iger said, citing long-term contracts with sports leagues and cable operators.
The decision to delay introduction of Disney’s Infinity video-game system to August from June will mean less revenue this year for the company’s interactive division and less chance of a profit for the year, a goal Iger previously set.
To contact the reporter on this story: Christopher Palmeri in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Palazzo at email@example.com