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Disney Profit Rises 21% On ESPN, Theme Parks


Diversified media and entertainment conglomerate Walt Disney Co. (DIS) said Tuesday after the markets closed that its second quarter profit rose 21% from last year, as strong performance by its media networks and theme parks divisions helped offset a loss at its movie studio.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.

Disney shares are currently gaining 1.35% in after hours trading after closing the day's regular trading session at $44.30, up 48 cents or 1.10%. The shares trade in a 52-week range of $28.19 to $44.50.

In the last few quarters, Disney has benefited immensely from its media networks and theme parks businesses. Higher revenue from television channels especially ESPN and increased guest spending and attendance at the company's theme parks have helped Disney to record higher profits.

Second quarter revenue from the company's media networks segment, which includes cable network ESPN and broadcaster ABC, rose 9% year-over year to $4.69 billion, while the segment's operating income for the quarter surged 13% to $1.73 billion.

Operating income at Cable Networks rose 11% to $1.5 billion in the second quarter due to growth at at ESPN and, to a lesser extent, the worldwide Disney Channels. Operating income at Broadcasting jumped 37% to $229 million, due to lower programming and production costs and higher advertising revenue.

Revenue from parks and resorts grew 10% to $2.90 billion in the second quarter, while segment's operating income surged 53% to $222 million, driven by growths at the company's domestic parks and resorts, Tokyo Disney Resort and Hong Kong Disneyland Resort.

Second quarter revenue from the company's studio entertainment division fell 12% to $1.2 billion, and the division swung to a $84 million operating loss due to lower worldwide theatrical results reflecting the flop of the sci-fi film " John Carter" as well as the related film cost write-down.

The company said in March that it it expected " John Carter" to generate an operating loss of about $200 million during the second quarter ending that would lead to a studio segment operating loss of between $80 and $120 million for the quarter.

However, things are looking brighter for the company's movie business. "The Avengers," the latest movie from Disney subsidiary Marvel, has shattered domestic box office records with a $207.1 million opening weekend for a global performance of more than $702 million to date, according to Robert Iger, Disney Chairman and CEO.

Consumer Products revenues for the quarter increased 8% to $679 million and the segment's operating income grew 4% to $148 million.

Interactive Media revenues for the quarter rose 13% to $179 million, while the division's operating loss narrowed to $70 million from $115 million last year.

For the second quarter ended March 31, 2012, the Burbank, California-based company reported net income of $1.14 billion or $0.63 per share, compared to $942 million or $0.49 per share for the year-ago quarter.

The latest quarter results include restructuring and impairment charges of $38 million and a $184 million non-cash gain on the company's existing equity investment in UTV Software Communication Ltd. which arose in connection with the acquisition of a controlling interest in UTV. The items together resulted in a net $0.05 benefit to the quarter's earnings per share.

Excluding these items, adjusted earnings for the latest quarter were $0.58 per share.

On average, 29 analysts polled by Thomson Reuters expected the company to earn $0.55 per share for the second quarter.

Segment operating income for the quarter grew 10% to $1.95 billion from $1.77 billion a year earlier.

Revenue for the second quarter increased 6% to $9.63 billion from $9.08 billion in the same quarter last year. Twenty-seven analysts had a consensus revenue estimate of $9.56 billion for the second quarter.

Among others in the industry, Viacom, Inc. (VIA,VIAB) last week reported a 56% rise in second quarter profit, driven by higher affiliate fees and ad revenues as well as lower distribution costs. Viacom's revenue for the second quarter grew 2% to $3.33 billion.

by RTTNews Staff Writer

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