Disney gains even as profit slides
LOS ANGELES (AP) — Shares of Walt Disney (DIS) rose modestly Friday after the company reported a stronger performance at its ABC Television network and increased attendance at its theme parks.
Investors shrugged off a 42% drop in profit for the company's fiscal first quarter, which was hurt by an $83 million after-tax charge for investments in aircraft Disney leased to bankrupt United Airlines. Also skewing the results, was a one-time gain of $216 million from the sale of shares in Knight Ridder, which boosted profit in the first quarter last year.
After the markets closed Thursday, Disney reported net income for the quarter ended Dec. 31 of $256 million, or 13 cents share, compared with net income of $438 million, or 21 cents, in the same quarter a year earlier.
Excluding the special items, profits improved to 17 cents per share, compared with 15 cents a share, the company said. Analysts at Thomson First Call had been expecting income of 15 cents a share.
Revenue in the most recent quarter grew 6% to $7.47 billion.
Disney has said it expects earnings per share growth of between 25% and 35% in 2003 as it profits from investments made in the past few years.
"Our most recent quarter's results, especially the strength of the Disney parks in the face of continued economic softness, are further evidence of the soundness of our strategic plan," Disney Chairman and Chief Executive Michael Eisner said in a statement.
Attendance and per capita spending at Disney's domestic theme parks rose during the past year, contributing to a 20% jump in operating income, to $225 million.
Disney said international visits grew 17% at Walt Disney World in Orlando, and even higher at the Disneyland Resort in Anaheim, Calif., although it did not provide specific numbers.
The company acknowledged, however, that it's already seeing a reluctance to book travel to its domestic parks due to uncertainty over war with Iraq. Disney President Robert Iger said tourists are now booking travel only 14 to 30 days ahead of time.
Operating income at Disney's media networks division, which includes ABC and its cable networks, dropped 7% in the quarter to $225 million, although revenue increased 9%.
Disney said it is beginning to see the results of higher ratings at ABC. Advertising revenue climbed during the quarter while costs decreased. The network has had several hits, including low-cost reality programs such as The Bachelor.
"I believe we have turned the tide at ABC," Eisner said.
Iger said the network has been able to sell available ad slots for as much as 25% above the prices advertisers agreed to pay during the upfront negotiations last year.
Cable results were lower as Disney's ESPN network continues to amortize the high cost of licensing rights for NFL and NBA games. But Disney Chief Financial Officer Thomas Staggs said he expects double-digit growth in operating profit for the full year at ESPN.
Operating income also sagged at Disney's movie studio on lower revenue from theatrical releases, partially offset by an income increase from the sale of DVDs.
Last year, Eisner came under pressure from Disney's board of directors to improve company performance. The board rewarded his efforts with a $5 million bonus, which he opted to take in restricted stock.
Eisner said changes in the board have improved the relationship with management. Board members have been criticized for years for being too cozy with Eisner, a situation he said has been resolved by shrinking the board's membership by four seats to 13 and boosting the power of independent directors.
"If the criticism was valid two or three years ago, I think praise is appropriate now," he said.
Copyright 2003 The Associated Press.
LOS ANGELES (AP) — Shares of Walt Disney (DIS) rose modestly Friday after the company reported a stronger performance at its ABC Television network and increased attendance at its theme parks.
Investors shrugged off a 42% drop in profit for the company's fiscal first quarter, which was hurt by an $83 million after-tax charge for investments in aircraft Disney leased to bankrupt United Airlines. Also skewing the results, was a one-time gain of $216 million from the sale of shares in Knight Ridder, which boosted profit in the first quarter last year.
After the markets closed Thursday, Disney reported net income for the quarter ended Dec. 31 of $256 million, or 13 cents share, compared with net income of $438 million, or 21 cents, in the same quarter a year earlier.
Excluding the special items, profits improved to 17 cents per share, compared with 15 cents a share, the company said. Analysts at Thomson First Call had been expecting income of 15 cents a share.
Revenue in the most recent quarter grew 6% to $7.47 billion.
Disney has said it expects earnings per share growth of between 25% and 35% in 2003 as it profits from investments made in the past few years.
"Our most recent quarter's results, especially the strength of the Disney parks in the face of continued economic softness, are further evidence of the soundness of our strategic plan," Disney Chairman and Chief Executive Michael Eisner said in a statement.
Attendance and per capita spending at Disney's domestic theme parks rose during the past year, contributing to a 20% jump in operating income, to $225 million.
Disney said international visits grew 17% at Walt Disney World in Orlando, and even higher at the Disneyland Resort in Anaheim, Calif., although it did not provide specific numbers.
The company acknowledged, however, that it's already seeing a reluctance to book travel to its domestic parks due to uncertainty over war with Iraq. Disney President Robert Iger said tourists are now booking travel only 14 to 30 days ahead of time.
Operating income at Disney's media networks division, which includes ABC and its cable networks, dropped 7% in the quarter to $225 million, although revenue increased 9%.
Disney said it is beginning to see the results of higher ratings at ABC. Advertising revenue climbed during the quarter while costs decreased. The network has had several hits, including low-cost reality programs such as The Bachelor.
"I believe we have turned the tide at ABC," Eisner said.
Iger said the network has been able to sell available ad slots for as much as 25% above the prices advertisers agreed to pay during the upfront negotiations last year.
Cable results were lower as Disney's ESPN network continues to amortize the high cost of licensing rights for NFL and NBA games. But Disney Chief Financial Officer Thomas Staggs said he expects double-digit growth in operating profit for the full year at ESPN.
Operating income also sagged at Disney's movie studio on lower revenue from theatrical releases, partially offset by an income increase from the sale of DVDs.
Last year, Eisner came under pressure from Disney's board of directors to improve company performance. The board rewarded his efforts with a $5 million bonus, which he opted to take in restricted stock.
Eisner said changes in the board have improved the relationship with management. Board members have been criticized for years for being too cozy with Eisner, a situation he said has been resolved by shrinking the board's membership by four seats to 13 and boosting the power of independent directors.
"If the criticism was valid two or three years ago, I think praise is appropriate now," he said.
Copyright 2003 The Associated Press.
