By Tess Stynes
Walt Disney Co. said its earnings rose a better-than-expected
11% during the quarter ended in June, boosted in part because of
the latest "Avengers" film as well as the continued popularity of
merchandise related to the "Frozen" film.
Shares, though, fell 2.1% to $119.15 in after-hours trading as
the company's revenue fell short of analyst expectations amid
slower growth at its media networks and parks segments.
Revenue rose 5% at media networks and 4% at the parks segment in
the third quarter, both representing smaller increases than the
first two quarters.
Profits at Disney's cable networks, its largest business,
increased 7% to $2.08 billion on gains in program sales and higher
affiliate revenue, driven by contractual rate increases. Broadcast
operating income decreased 15% to $300 million, mostly the result
of higher programming costs, lower advertising revenue and higher
labor-related costs.
At the company's parks and resorts segment, profits rose 9% to
$922 million as an increase in Disney's domestic operations was
partially offset by a decrease overseas.
In all, for the period ended June 27, Disney reported a total
profit of $2.48 billion, or $1.45 a share, up from $2.25 billion,
or $1.28 a share, a year earlier. Revenue increased 5% to $13.1
billion.
Analysts polled by Thomson Reuters expected per-share profit of
$1.42 and revenue of $13.23 billion.
Disney's film studio, which gets a cut of revenue from products
based on its movies, posted profit growth of 15% to $472 million.
Revenue rose 13% to $2 billion, reflecting the strong performance
of Marvel's "Avengers: Age of Ultron" in the latest period,
compared with Marvel's "Captain America: The Winter Soldier" in the
year-earlier period.
In recent quarters, Disney's results have been buoyed by sales
of merchandise tied in with its hit movie "Frozen," which was
released in late 2013. Plans for a "Frozen Ever After" next year at
Epcot Center in Orlando, Fla., highlight Disney's strategy of
focusing on key franchises that live on for many years as
theme-park rides, toys, videogames, television shows, pajamas and
just about anything else that helps keeps revenue rolling in.
The company is expecting to get a similar boost, both at the box
office and on store shelves, with "Star Wars: The Force Awakens,"
which will be released later this year.
In the latest period, consumer products revenue grew 6% to $954
million, while operating profit grew 27%. Merchandise licensing
revenue growth reflected the performance of merchandise based on
"Frozen," "Avengers" and "Star Wars," partially offset by lower
revenues from Spider-Man merchandise.
Write to Tess Stynes at tess.stynes@wsj.com
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