Disney 4Q Profit Rises As Parks, Toys, Interactive Grow

on November 07 2013 6:23 PM

Space Mountain and Aerosmith's Rock 'n' Roller Coaster weren't the only things on the rise this past summer at Walt Disney properties.

Walt Disney Co. (DIS.N) has reported higher profit for the quarter that ended September that beat Wall Street expectations, thanks to increased spending from summer visitors at its U.S. theme parks, a rise in sales of toys as well as Disney's interactive division posting an operating profit on the strength of the new video game "Disney Infinity," several news outlets have reported.

The overall results were mainly in line with forecasts, but shares dropped in after-hours trading Thursday, continuing a dip that started earlier in a day for stocks that was, for the most part, nothing to get too excited about. Disney also announced Thursday developments for two major subsidiaries: Marvel and Lucasfilm.

Parks and resorts revenue grew 8 percent to $3.72 billion as visitors spent more in the U.S., according to the Associated Press. Interactive revenue more than doubled to $396 million, as the division achieved its second quarterly profit since results began being broken out for the unit in late 2008.

Walt Disney Co. posted diluted earnings per share of 77 cents after analysts projected Disney would report 76 cents per share, according to the average estimate from Thomson Reuters I/B/E/S. Net income for the quarter rose to $1.4 billion -- a 12 percent gain from a year earlier.

In after-hours trading, shares of Disney slipped 2.8 percent to $65.30, which was down from an earlier $67.15 close on the New York Stock Exchange, Reuters notes. The company's shares had gained almost 35 percent this year prior to the earnings announcement.

"There's been such a run-up in this stock that people are just readjusting their numbers," Matthew Harrigan, a media analyst with Wunderlich Securities, who has a buy rating on the stock at $77 target, said. "There's not much upside surprise with this company. It came in almost exactly what we expected."

Meanwhile, the company has set the release date for "Star Wars: Episode VII" to be Dec. 18, 2015, according the Associated Press. Disney also has said it would produce four original TV series for Netflix based on characters such as "Daredevil," and that in would begin airing in 2015.

And sales of "Infinity" as well as a licensing agreement for mobile games in Japan drove the gains. Revenue at Disney's pay TV networks such as ESPN rose 1 percent to $3.57 billion. That's largely because a big chunk of fees from distributors arrived in the previous quarter due to meeting audience obligations early, the AP reports.

 

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