Disney profit beats Street, no sign economy hurts
LOS ANGELES (Reuters) - Walt Disney Co's quarterly profit sailed past Wall Street targets as attendance rose at its Florida, Paris and Hong Kong parks and a new "High School Musical" DVD proved a hit, sending its stock up about 5 percent.
Disney saw no sign that the U.S. economic downturn had affected consumer products sales or theme park bookings, Chief Financial Officer Tom Staggs told reporters, and the after-hours stock rise more than made up for a 2.3 percent drop in regular trade.
The Hollywood writers' strike, which started a month into the quarter, failed to hurt results. Costs dropped as production dropped, and advertising rates rose despite lower TV ratings, Staggs said.
But the company said on Tuesday it was optimistic the strike would end soon.
"Our bookings are modestly ahead of last year at this point and we are pleased with their performance so far," Staggs said. "Pricing on hotel (rooms) is slightly ahead of last year."
He added that the company will "watch the market and adjust (pricing) if we need to."
Net profit dropped to $1.25 billion, or 63 cents per share, from $1.7 billion, or 79 cents per share, in the year-earlier quarter, when results had been boosted by the sale of interests in Us Weekly and E! Entertainment. Revenue rose 9 percent to $10.5 billion.
The 63 cents per share earnings topped Wall Street's average target of 52 cents, according to Reuters Estimates.
"It's a great beat, I'm most focused on the attendance level at the theme parks, as well as what their comments will be about business conditions going forward," said Matt Kaufler, portfolio manager at Clover Capital Management.
Chief Executive Robert Iger said in a statement the company had started 2008 with an 'outstanding quarter'. The quarter ended December 29 is Disney's fiscal first quarter.
Its media networks operating profit rose 28 percent to $908 million, profit at its parks rose 25 percent to $505 million, studio income dropped 15 percent to $514 million, and consumer products showed a 38 percent rise in profit to $322 million.
Staggs said second-quarter advertising rates were tracking at double-digit percentage rates ahead of last year and sales at Disney-owned television stations were ahead of last year by mid-single-digit percentages.
Disney shares traded at a ratio of 13.2 times estimated fiscal 2009 earnings, compared with 14.2 times earnings for Time Warner Inc and 13.5 for News Corp.
Disney shares in after hours trade rose to $31.55 from a close of $30.07 on the New York Stock Exchange, where the stock had dropped 83 cents, or 2.7 percent, for the day.
(Additional reporting by Kristina Cooke and Sue Zeidler)
(Reporting by Gina Keating; Editing by Braden Reddall)
