By Lisa Richwine
LOS ANGELES May 7 Media giant Walt Disney Co
reported a 32 percent increase in profit that beat Wall
Street expectations, boosted by higher spending and attendance
at U.S. theme parks, and the movie box office success of "Oz the
Great and Powerful."
Revenue for the company that operates cable networks, theme
parks and a movie studio increased 10 percent to $10.6 billion.
At the parks division, revenue gained 14 percent and operating
income climbed 73 percent as resorts in Florida and California
attracted more visitors and guests spent more.
CEO Bob Iger said Disney parks drew more visitors thanks to
investments in new attractions such as Cars Land at Disneyland
Resort in Anaheim, California, and the expansion of Fantasyland
at Walt Disney World in Orlando, Florida.
"The product that we recently put online really worked, like
California Adventure and Fantasyland, and the product we had
online for years and years in many respects looked better to
consumers," Iger told analysts on a conference call.
Profit rose 8 percent at the media networks unit, the
company's largest division, helped by higher advertising and
fees from cable operators at sports network ESPN.
Those strong performances helped offset a poor showing by
the broadcasting division.
Operating income declined by 40 percent at the broadcasting
unit, as the ABC television network brought in less advertising
revenue amid a ratings slump and higher programming costs. Iger
said he wanted a stronger primetime lineup at the channel, with
more shows produced by ABC rather than other studios.
"We could use a few more hits, and certainly a few more hits
that we own," he said.
Overall, net income increased 32 percent from a year earlier
to $1.5 billion for January through March, Disney said on
Tuesday. Adjusted earnings per share rose 36 percent to 79
cents, beating Wall Street expectations of 77 cents, according
to Thomson Reuters I/B/E/S.
Disney's movie studio recorded a profit of $118 million,
compared with a loss a year earlier from the box office bomb
"John Carter." This year, the "Wizard of Oz" prequel lifted
The studio also is looking at a big third quarter with
current blockbuster "Iron Man 3," a Marvel superhero sequel that
has grossed $711 million around the world since its release.
Disney is working on sequels to the "Star Wars" franchise
after last year's $4 billion purchase of Lucasfilm. The company
is also developing "Star Wars" properties for television and
parks, Iger said.
The interactive gaming division recorded a loss of $54
million. Iger had set a goal of turning the unit profitable in
2013. He told analysts it was now "doubtful" the unit will break
even this year after the company delayed the release of its
Infinity games and toys initiative to August from June. Infinity
"is going to help drive profitability for fiscal 2014," he said.
Shares of Disney fell to $65.28 in after-hours trading, a
1.2 percent drop from their earlier close of $66.07 on the New
York Stock Exchange.
Investors likely were taking profits after the shares had
run up more than 30 percent this year, Evercore Partners analyst
Alan Gould said. "It's selling into strength," Gould said. "The
only weak area was the broadcasting. I don't see anything