Earnings: DIS Profit More Than Doubled For Quarter; Up 33 Percent For Year

Updated. Hard to argue when Disney CEO Bob Iger says the company had a “spectacular” year. The quarter that ended Sept. 30, which is also when Disney’s fiscal year closed, is the kind that will be tough to live up to next year. Profit more than doubled to $782 million from $379 million with diluted earnings per share of $0.36 compared to $0.19 cents per share in the same quarter last year. Revenue was up 14 percent to $8.78 billion for the quarter from $7.7 billion the previous year.
For the fiscal year, Disney’s profit was up 33 percent, to $3.3 billion from $2.5 billion in FY05, with diluted earnings per share of $1.64 compared to $1.22 per share. Revenue was $34.3 billion, up 7 percent from $31.9 billion.
— Media Networks revenue rose 10 percent to $3.7 billion while operating income for the segment hit $883 million, up 18 percent.
— Cable Networks continues to boost the bottom line, up 16 percent in revenue and 22 percent in operating income, primed by growth at ESPN. That was offset, in part, by the costs of Mobile ESPN.
— Broadcasting was rough, up 1 percent in revenue and down 40 percent in operating income.
— The internet group literally cost the company, with increases attributed to “the launch of Disney branded mobile phone services as well as the costs of other new initiatives.”
Update: Online advertising: ABC.com has 36 different advertisers sponsoring its six streamed series. Iger: “The CPM rate, now, admittedly, it is early, is four to five times the CPM rate in delivery of adults 18 to 49 in primetime, which is a rather significant number.”
Online revenue streams: Online advertising growth potential is “significant; Disney has “done extremely well” on iTunes. “We have launched on two other movie platforms and given some of the announcements that have been made this past week, we believe we will have opportunities to sell movies and television shows on many other new platforms … Since those deals are not exclusive and we are taking basically a platform agnostic approach, our growth in what I will call purchases is going to increase substantially too.” Disney has yet to embrace Xbox, Google, Amazon, AOL, etc.
Music: Iger described “a great synergy when it comes to music between the Disney Channel, disney.com, Radio Disney, and the Disney Phone. There will be very, very robust music offerings that in effect tie into one another across all those platforms.”
Mobile: CFO Thomas Staggs said the investment in Disney Mobile’s launch “will be offset by the decreased spending at ESPN mobile, because we have transitioned that into a part of our licensing business, so that will not be a driver of year-over-year increased spend on a combined basis in mobile.”
Mass retailers & downloads: Asked about concerns of Wal-mart and Target as Disney expands movie downloads, Iger said the relationship with mass retailers generally “is strong” and that the company is in “a lot of discussions with a lot of different retailers about their own digital download capabilities … We actually expect to cooperate with them when they launch such services.” He admitted Disney’s own download efforts has “caused some tension over issues like pricing and windowing” but he believes the tension will dissipate as more is learned about consumer response.Iger: “We have not seen any impact, by the way, that is negative or cannibalistic from our download experience, and actually believe that we are growing market share rather than moving business from one platform to the other.”
Gaming: Disney is increasing investment as it builds a branded gaming business, announcing earlier in the week a new studio just to create games for Nintendo Wii and DS. Iger: “We see tremendous opportunity in the fact that kids and ‘tween games account for about half of the $17 billion annual video game market.” The Kingdom Hearts franchise has sold 10 million-plus copies globally.
Earnings | Webcast | Transcript

loading

Comments have been disabled for this post