The Walt Disney Company’s media networks and film studio helped offset and flat parks and resorts performance to boost its earnings during the fiscal first quarter, the company announced on Tuesday
Overall, the company’s operating income grew 9 percent during the quarter, to about $1.575 billion.
Operating outcome at Walt Disney Pictures grew 30 percent to $243 million, while operating income at its media networks – including the Disney Channels and ESPN -- increased 11 percent.
Advertising revenue was up mid-single digits at ESPN, the company said.
The bump at the studio was primarily driven by an increase in home entertainment (i.e. DVDs) which partially offset decreases in theatrical distribution and music sales, the company said. (Disney said the studio’s performance was also a bit lower without "High School Musical 3," which came out during the first quarter of fiscal 2009.)
Still, Jay Rasulo, Disney’s CFO, cautioned investors that advertisers and consumers “are still making buying decisions at the last minute,” making the rest of the fiscal year tough to predict.
Its earnings per share were virtually unchanged at $0.44, compared to $0.45 last year.
President Robert Iger said he was “pleased” with the results and “excited about
our creative pipeline,” with the Tim Burton-directed “Alice in Wonderland,” starring Johnny Depp, and “Toy Story 3” on the way.
Iger said he is also excited about the launch of Apple's iPad. The company is developing applications for Disney, ABC and ESPN’s “Sportscenter” for the Apple tablet, Iger said, though he declined to reveal specifics.
“We feel it’s a game-changer in terms of new forms of content we can develop,” he said. “The interactivity and quality of the screen will allow us to (develop) product that is different than product on TV or the Internet.”
Iger hinted that while the company’s networks are not currently in negotiations over retransmission fees -- like those that Fox and Time Warner Cable tussled with late last year -- he’s planning to squeeze more cash out of distributors for Disney content. Iger called it a “trend we fully intend to participate in.”
When asked directly whether he is prepared to pull Disney’s broadcast signal as Fox threatened to do, Iger responded: “We’re pretty resolute. We know the value of these stations, and the value in their local markets. We feel we would do whatever we can to avoid that through negotiation” but “we feel we have an obligation” to maximize return on the company’s investment in content.