NEW YORK (Reuters) - Walt Disney Co reported better-than-expected gains in profit and revenue, reflecting an improving economy that got consumers traveling to its theme parks and businesses buying up ad time on its TV networks.
Disney is the last of the entertainment powerhouses to report quarterly earnings, and its results on Tuesday stuck to the script written by News Corp and Time Warner Inc. -- chiefly, that a major recovery in advertising spending buoyed results.
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Shares in Disney jumped 3.6 percent to $42.65 following the earnings report, up from a close of $41.18 on the New York Stock Exchange. The world’s largest media company by market value posted a 54 percent rise in profit and a 10 percent jump in revenue.
“They were very strong across the board,” said Chris Marangi, an analyst with Gabelli & Co. “The television division was particularly strong, driven by the cable networks.”
Disney’s television business stole the show, due in large measure to the performance of the ESPN and its family of sports channels. Profit rose 47 percent at the division.
Ratings at ESPN were up about 9 percent in prime-time during the last three months of the year thanks to Monday Night Football, college football bowl games, the National Basketball Association and its flagship “SportsCenter” program. The TV division also includes the ABC broadcast network and Disney Channels.
Disney’s two other biggest business divisions -- studio entertainment and parks and resorts -- also turned in higher operating profit for its fiscal first quarter.
Calling the results “spectacular,” Caris & Co. analyst David Miller said the quarter underscores the advances in the economy over the last several months.
“Advertising is a leading indicator,” he said. “But the beauty of the stock is they’ve also got this lagging business in the form of the parks division. Your ‘average Joe’ isn’t going to make the reservation to go down to Orlando and drop $3,000 on a vacation until he feels confident about the future.”
With more guests taking vacations at its resorts and spending more while they were there, its parks and resorts profit climbed 25 percent.
Studio operating profit rose 54 percent and consumer products profit increased 28 percent. In its interactive division, the acquisition of social-gaming outfit Playdom resulted in a quarterly loss, though revenue jumped 58 percent.
Analysts had been looking for the entertainment giant to post earnings of 56 cents a share. Disney’s revenue was up 10 percent to $10.72 billion, above analysts’ average estimate of $10.52 billion.
Reporting by Paul Thomasch; Editing by Gary Hill