Disney beats forecasts as 'Frozen' fuels earnings
Media company Walt Disney on Tuesday reported higher profit that beat Wall Street expectations for the quarter ended in March, boosted by the continued strength of its blockbuster animated film "Frozen."
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The company said it posted adjusted earnings of $1.11 a share, beating the 96 cent average forecast of analysts surveyed by Thomson Reuters I/B/E/S. A year ago, Disney reported adjusted earnings of 79 cents a share.
Disney shares rose 1.3 percent in after-hours trading, to $82.05 a share. (Click here to get the latest quotes for Disney.)
Net income for the quarter increased to $1.9 billion from $1.5 billion a year earlier, lifted by growth at its movie studio.
The animated blockbuster "Frozen," about two royal sisters in an icy kingdom, continued to propel the studio, which saw its operating income quadruple to $475 million from $118 million a year earlier, partially on the strength of "Frozen" sales on home video.
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To further cash in on the film's popularity, Disney will increase the presence of "Frozen" characters at theme parks and could to use them in its publishing and interactive gaming businesses, Chief Executive Bob Iger said on a conference call.
"The passion for this film and these characters is so extraordinary, so well beyond what we've ever imagined, that it would be hard to believe that it wouldn't sustain itself over a fairly long period of time," Iger said.
The film had worldwide ticket sales of $1.2 billion, including $400.3 million during its five-month run in U.S. and Canadian theaters.
"The real surprise was the studio," Wunderlich Securities analyst Matthew Harrigan said. He said he had expected expecting operating income of around $300 million for the unit. "They have importantly managed to revitalize Disney Animation as a full peer to Pixar."
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All of Disney's other units reported higher profit.
Operating earnings at its TV operations, its largest unit, increased by 15 percent despite lower ratings at its ABC broadcast network.
The company's sports behemoth ESPN helped boost cable operating income by 15 percent, largely through higher affiliate fees from pay TV providers.
Higher average ticket prices helped lift operating income at Disney's theme park operations, which increased by 19 percent to $457 million on higher attendance at Disneyland and increased guest spending at Walt Disney World.
Shanghai theme park
Disney last week announced the company and its Chinese partners would increase their investment in a theme park under construction in Shanghai by $800 million. Iger on Tuesday said it may invest more in the park, which is slated to open in 2015.
"It's a pretty compelling circumstance or opportunity for us and our partners and probably will deserve an infusion of more capital investment," he said.
The interactive gaming unit reported an operating profit of $14 million, compared with a $54 million loss a year earlier, on the strength of sales of the Disney Infinity video game.
—By Reuters