Disney Reports Increased Third Quarter Results
July 30, 2008
http://news.awn.com/index.php?ltype=...sitem_no=24186The Walt Disney Company today reported earnings for the third fiscal quarter and nine months ended June 28, 2008. Diluted earnings per share (EPS) for the third quarter increased to $0.66, compared to $0.57 in the prior-year quarter.
EPS for the current quarter included an accounting gain related to the acquisition of the Disney Stores in North America, a gain on the sale of movies.com, and the favorable resolution of certain prior-year income tax matters. Collectively, these items totaled $0.04 per share.
For the current nine-month period, diluted EPS was $1.87. EPS for the prior-year nine-month period, which included gains on sales of interests in E! Entertainment and US WEEKLY, income from the discontinued operations of the ABC Radio business, and an equity-based compensation plan modification charge, which were all recognized in the first quarter of fiscal 2007, was $1.81. Excluding these items and the current-year items discussed above, EPS for the current-year nine months was $1.83 compared to $1.50 in the prior-year nine months.
"We've had another solid quarter at The Walt Disney Company, further illustrating our creative momentum, the competitive strength of our brands and our ability to cohesively manage a great collection of assets to maximize shareholder value," said Robert A. Iger, president and CEO.
Operating income at Cable Networks increased 14 percent to $1.2 billion for the quarter primarily due to growth at ESPN and, to a lesser extent, higher income from cable equity investments and an increase at the international Disney Channels.
Operating income at Broadcasting decreased 11 percent to $260 million for the quarter primarily due to higher production cost amortization related to programs in syndication and lower advertising sales at the owned television stations, partially offset by lower costs for new scripted programming for the ABC Television Network. These decreased costs were the result of lower expenses for pilots as pick up decisions were delayed in the current year primarily due to the Writer's Guild work stoppage.
Parks and Resorts revenues for the quarter increased 5 percent to $3 billion and segment operating income increased 3 percent to $641 million. Revenue growth was primarily due to an increase at Disneyland Resort Paris driven by favorable currency translation and higher guest spending and attendance.
Operating income growth was driven by increases at Walt Disney World Resort and Disneyland Resort Paris, partially offset by a decrease at Disneyland Resort. Operating results at the theme parks reflected decreased attendance due to the timing of the Easter holiday, which fell in the third quarter in fiscal 2007 and in the second quarter in fiscal 2008.
Studio Entertainment revenues for the quarter decreased from $1.8 billion to $1.4 billion and segment operating income decreased from $190 million to $97 million.
Lower segment operating income was primarily due to a decrease in worldwide theatrical distribution reflecting the strong performance of PIRATES OF THE CARIBBEAN: AT WORLD'S END in the prior-year quarter compared to THE CHRONICLES OF NARNIA: PRINCE CASPIAN in the current quarter.
Consumer Products revenues for the quarter increased from $537 million to $642 million and segment operating income decreased from $118 million to $113 million. The acquisition of the Disney Stores in North America drove a significant portion of the revenue increase for the quarter.
Lower segment operating income for the quarter was driven by a decrease at Disney Interactive Studios which was largely offset by an increase in earned revenue at Merchandise Licensing driven by the success of HANNAH MONTANA and HIGH SCHOOL MUSICAL merchandise. The decrease at Disney Interactive Studios was due to lower sales of self-published video games due to the strong performance in the prior-year quarter of games based on PIRATES OF THE CARIBBEAN: AT WORLD'S END compared to THE CHRONICLES OF NARNIA: PRINCE CASPIAN and HIGH SCHOOL MUSICAL in the current quarter and higher video game development costs.
The increase in revenues due to the acquisition of the Disney Stores in North America was offset by the related operating costs and the absence of licensing revenue from the former licensee.