Disney beats the Street
Media conglomerate reports strong growth in sales and profits thanks to ESPN, theme parks. Stock soars.
NEW YORK (CNNMoney.com) -- Walt Disney reported greater than expected sales and earnings for its latest quarter Tuesday thanks to strength at its ESPN cable network and its theme park business.
The media and entertainment company reported revenue of $10.5 billion for its fiscal first quarter, up 9% from a year ago, and beating analysts' forecasts of $10.04 billion.
Disney 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. 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%.
"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.
Disney's results were driven largely by strength in its two biggest divisions, television networks and theme parks. Revenue from its broadcasting and cable operations, which include ESPN and ABC, increased 10%, due to higher advertising sales, while operating profits rose 28%
Revenue from the company's theme parks and resort operations grew 11% and operating profits grew 25%, defying expectations that Disney would take a hit in this segment due to the slower economy.
Disney reported that domestic customer spending actually increased due to higher ticket prices, and greater food and merchandise sales. A weaker dollar also contributed to international attendance at domestic parks, Iger said in a conference call with analysts.
Disney does a good job of keeping costs down, said analyst Doug Creutz of Cowen & Company, but its theme parks could take a hit later on in the year, due to the economic downturn.
The one weak spot in the first quarter was the company's movie studio business. Sales were flat compared to a year ago and operating profits fell 15%, but that decline was just due to the natural cycle of the business, added chief financial officer Tom Staggs.
Disney's results come a day after rival News Corp. (NWS, Fortune 500) reported profits for its fiscal second-quarter that matched analysts' expectations. Time Warner (TWX, Fortune 500), which owns CNNMoney.com, will release its fourth-quarter results Wednesday morning.