Toy Story 3, Alice boost Disney profits

LOS ANGELES - Hit movies like “Toy Story 3” and higher advertising sales lifted Walt Disney’s quarterly profit above Wall Street’s expectations, despite dwindling theme park attendance in the United States.

By (Reuters)

Published: Wed 11 Aug 2010, 12:27 PM

Last updated: Mon 6 Apr 2015, 3:12 AM

Other box office smashes such as “Iron Man 2” and “Alice in Wonderland” helped studio revenue rise 30 percent and generated a strong operating profit.

Revenue at its media networks arm, home to sports cable network ESPN and broadcaster ABC, rose 19 percent to $4.7 billion.

The studio entertainment division chalked up a $123 million operating profit after posting a loss a year ago. But in the theme parks arm — which operates Disneyland resorts around the world — operating income slid 8 percent to $477 million as attendance and hotel occupancy dropped. Disney ended widespread ticket discounts in the quarter.

This quarter, domestic hotel reservations were running about 9 percent below the prior-year quarter’s pace, executives told analysts on a conference call.

Investors had expected solid numbers from the entertainment and leisure conglomerate after strong results from media rivals Time Warner and CBS underscored an advertising rebound.

Disney executives said Tuesday spot pricing was running about 20 percent above “upfront” — or advance — advertising prices.

“Disney closed out the big media earnings posting strong ad revenue growth at the ABC and ESPN and gave an optimistic picture for scatter pricing. Their comments look like others we’ve seen to date,” said Tony Wible, an analyst with Janney Capital Markets.

“The cable division is the business that drives this business and Disney had an impressive quarter,” said RBC Capital analyst David Bank.

Operating income in media networks rose 43 percent to $1.9 billion, outpacing analysts’ forecasts for about $1.4 billion.

Disney’s net income rose to $1.3 billion in the third quarter ended July 3, from $954 million a year earlier.

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