Walt Disney reported greater than expected sales and earnings for its latest quarter on Tuesday mainly to its ESPN cable network and its theme park business as it sought to reassure investors the weakening economy was not affecting the media conglomerate.
The media and entertainment company reported revenue of $10.5 billion for its fiscal first quarter, up 9 percent from a year ago, and beating analysts' forecasts of $10.04 billion.
The Burbank, Calif.-based reported a net profit of $1.25 billion, or 63 cents per share, down 27% from the same period last year but beating consensus estimates of 52 cents per share. This included a boost from sales of the company's interests in E! Entertainment and Us Weekly, as well as results from its discontinued ABC radio operations, but its latest results easily surpassed most analysts' expectations and sent the stock higher in evening trading.
Shares of Disney were up $1.61, or 5.4 percent, at $31.68 in after-hours trading.
Last year's results were lifted by gains from asset sales. Excluding those gains, Disney's earnings for this year's first quarter rose 29 percent.
We've started off 2008 with another outstanding quarter, marked by strong creative and operational performances, said chief executive Robert Iger in a statement.
The company signed Iger to a new five-year contract last week. Iger has been widely praised for increasing the company's profitability and consistently beating expectations.
During a conference call with analysts, Chief Financial Officer Tom Staggs said room reservations at Disney's theme parks are modestly ahead of where they were at this time last year. The company's theme parks in the December quarter caused its revenue to increase by 11 percent to $2.77 billion on strong holiday season attendance.
Iger said the ongoing Writers Guild of America strike, which has caused many primetime programs to go into reruns, did not have a significant impact on the December quarter. He said he is hopeful that an agreement between the writers and Hollywood studios can be reached soon.
The CEO also said the ABC television network is guaranteed to make far fewer pilots this year than in previous years, even if the writers' strike is settled quickly, allowing the network to achieve some cost savings.
Disney's results come a day after rival News Corp. reported profits for its fiscal second-quarter that matched analysts' expectations. Time Warner will release its fourth-quarter results Wednesday morning.