Disney Remains A Top Performer

Spurred by its surprise movie hit, “Frozen,” an animated movie about two sibling princesses trying to reconnect in an icy land, Walt Disney blew past analysts’ earnings estimates on Wednesday.  Fiscal first-quarter profit soared 33 percent.

The Walt Disney Company reported earnings that once again beat Wall Street estimates, helping to push shares up another 1.5% after-hours. These numbers come as Disney continues to execute extremely well, leveraging its unmatched portfolio of brands to drive increased television revenue, a growing share of the global box office, and strong park attendance. Thanks to fantastic results, shares have rallied more than 32% past in the past twelve months, recently hitting a new all-time high before falling alongside the market in January. While shares have performed extremely well over the past year, Disney remains one of the more compelling long-term investments, according to seekingalpha.com.

Cable Networks

Operating income at Cable Networks increased $325 million to $1.3 billion for the quarter due to growth at ESPN, higher equity income from A&E Television Networks (AETN) and, to a lesser extent, an improvement at the domestic Disney Channels. Higher operating income at ESPN was due to increased affiliate and advertising revenues and the absence of equity losses as a result of the prior-year sale of interest in the ESPN STAR Sports joint venture. The increase in affiliate revenue was driven by contractual rate increases, partially offset by a decrease as a result of the sale of ESPN UK in the fourth quarter of the prior year. Growth in ESPN advertising revenues was due to an increase in rates and units delivered, partially offset by lower ratings. Programming and production costs were comparable to the prior year as an increase due to higher contractual rates for NFL and college football was largely offset by a decrease due to the sale of ESPN UK. Higher equity income from AETN reflected lower programming and marketing costs and higher advertising revenues. Growth at the domestic Disney Channels was primarily due to higher affiliate revenues from contractual rate increases.

Broadcasting

Operating income at Broadcasting decreased $84 million to $178 million for the quarter due to higher programming costs, lower program sales and decreased advertising revenue, partially offset by higher affiliate revenues and lower general and administrative expenses. Higher programming costs were due to higher program write-offs and a contractual rate increase for Modern Family. The decline in program sales reflected higher sales of Revenge and Army Wives in the prior-year quarter. Lower advertising revenue was driven by a decrease at the owned television stations, partially offset by an increase at the ABC Television Network. The increase at the ABC Television Network was due to higher rates and more units delivered, partially offset by lower ratings. Affiliate revenue growth reflected higher contractual rates. Lower general and administrative expenses were driven by lower labor costs primarily as a result of decreased pension and postretirement medical costs.