Disney Surpasses Analysts' Q3 Estimates, Reports $1.3B Net Income
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Higher Ratings For Celtics-Lakers NBA Finals
Helps ESPN/ABC Boost Disney's Bottom Line |
Disney yesterday reported net income of nearly $1.3B, or $0.66 per share, for the FY Q3 ending June 28, up 9% from the year-ago period and beating analysts' estimates of $0.60 a share, according to Dawn Chmielewksi of the L.A. TIMES. Disney earned $9.2B in revenue, up 2% over last year, "buoyed by the strong performance of ESPN and the expansion of the Disney Channel in overseas markets." Disney's cable nets "delivered double-digit gains in operating income, up 14% to $1.2[B], thanks primarily" to ESPN. Cable net revenue climbed 12% to $2.6B. But Disney's operating income for Q3 dropped 11% to $260M, "dragged down by lower ad sales at the local television stations." Disney earned $1.5B in broadcasting revenue, flat with the year-ago period. Disney Senior Exec VP & CFO Thomas Staggs told investors that the "pace of ad sales for the local-station group, and to a lesser extent ESPN and the ABC television network, had slowed in recent weeks because of softness in the domestic auto, financial services and consumer electronics markets" (L.A. TIMES, 7/31). The WALL STREET JOURNAL's Peter Sanders reports Disney's media networks -- led by ESPN, which "reported higher subscriber fees and increased ratings from the NBA Finals and the U.S. Open and Masters golf tournaments" -- helped "offset advertising revenue softness at many of the company's television stations" (WALL STREET JOURNAL, 7/31). In N.Y., Brooks Barnes reports ESPN was a "profit engine for Disney" in the quarter, as profit "climbed 9[%] for the cluster of sports networks and Web sites." Higher ad revenue and payments from cable affiliates "were the primary reasons" (N.Y. TIMES, 7/31). At presstime, Disney shares were trading at $30.35, down 4.17% from yesterday's close of $31.67 (THE DAILY).
AD OUT: Pali's Rich Greenfield yesterday reduced Disney's earnings per share to $2.46 from $2.52 based, in part, on expected advertising weakness at ESPN in the autos and beverage categories. "We estimate that autos represent only 11-12% of ESPN's ad revenues, with beer/wine/alcohol representing mid-single digits," Greenfield wrote in a research note. "We suspect that sports marketing will not be first in line to be cut given the importance of its association with sports content and related demographics" (John Ourand, THE DAILY).
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