Walt Disney Co., the world’s biggest theme-park operator, posted third-quarter sales and profit that beat analysts’ estimates as pay-TV fees to the ESPN sports network countered flat cable advertising sales.
Net income rose 11 percent to $1.48 billion, or 77 cents a share, from $1.33 billion, or 67 cents, a year ago, Burbank, California-based Disney said today in a statement. Profit excluding some items was 78 cents, beating the 73-cent average of 22 analysts’ estimates compiled by Bloomberg.
Cable-network profit rose 10 percent, with ESPN enjoying gains in fees from pay-TV systems. Theme-park profit advanced 8.8 percent, fueled by higher admission prices at U.S. resorts and this year’s later Easter break. The consumer products unit boosted profit with sales of “Cars” and Marvel merchandise.
“This is a little better than expected, but there was really nothing that’s remarkable in these numbers,” said Matthew Harrigan, an analyst with Wunderlich Securities in Denver who recommends the stock. “The affiliate fees at ESPN were a little unexpected, and the parks were able to take advantage of the Easter holiday.”
Disney may consider new discounts at its domestic theme parks if the economy weakens, Chief Executive Officer Robert Iger said on a conference call with analysts, adding “We’re not thinking of doing that any time soon.”
Attendance at Disney’s domestic theme parks increased by 2 percent, Chief Financial Officer Jay Rasulo said on the call, and per-capita spending by 8 percent.
Disney will continue to make acquisitions, Iger said, without identifying potential targets. Since becoming CEO in 2005, the company has acquired Pixar and Marvel. Last month, Disney offered to buy the 49.6 percent of India’s UTV Software Communications Ltd., a production company, it doesn’t own for $454 million.
“We’re going to continue to deploy capital in this direction,” Iger said. He estimated that the $13 billion Disney has spent to acquire companies in the last five years represented about $23 billion in “enterprise value.”
Disney fell 45 cents to $34.25 in extended trading. The shares gained $1.67, or 5.1 percent, to $34.70 at 4 p.m. in New York Stock Exchange composite trading and have declined 7.5 percent this year.
Sales in the period ended July 2 gained 6.7 percent to $10.7 billion, exceeding analysts’ projections of $10.5 billion.
Cable revenue advanced 7.2 percent to $3.52 billion, with fees from pay-TV systems countering ad sales at ESPN that were little changed, the company said.
ABC’s profit rose 20 percent to $250 million, benefiting from lower production costs and higher network advertising. Total revenue from broadcasting decreased 1 percent to $1.43 billion, reflecting lower ad sales at local television stations, Disney said.
Profit at Disney’s consumer products division increased 32 percent to $155 million, buoyed by merchandise from the “Cars” animated movies and the Marvel character line. Revenue rose 13 percent to $685 million.
Revenue at Disney’s parks division increased 12 percent to $3.17 billion.
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