Walt Disney Co. Beats Wall Street Expectations Thanks In Part To ESPN
Walt Disney Co. "didn't disappoint in its results" for Q3 of this fiscal year, as revenue up 7% to $10.7B "helped net income rise" 11% to $1.5B, according to Marc Graser of DAILY VARIETY. Every division of Walt Disney Co. "enjoyed a considerable uptick in revenue during the company's third quarter, which wrapped up July 2, except the studio." The company's TV networks, "which typically generate a third of the company's earnings, hauled in" $4.9B during Q3, up 5% over last year's quarter, while profits rose 11% to $2B. ESPN "received much of the credit" for the strong results as its "growth led the 7% gain in revenues of $3.5 billion and a $1.8 billion profit haul among cable channels." Walt Disney President & CEO Bob Iger in a conference call with analysts and investors "touted ESPN's ad sales during the upfronts and its audience of 107 million people who 'read, watch, listen or log on to ESPN-branded media' each week." Iger also was "high on earnings from Pac-12 college sports broadcasts and a 12-year pact for the U.S. rights to Wimbledon" (VARIETY.com, 8/9). The AP's Ryan Nakashima noted the results were "better-than-expected." Ad revenue "was flat at ESPN as higher ad rates made up for the lack of the FIFA World Cup and Game 7 of the NBA finals this year." Excluding the "marquee sporting events from a year ago," ad revenue at ESPN rose 9%. Revenue at Disney TV networks, including ESPN, rose 7% to $3.52B (AP, 8/9). CABLEFAX DAILY notes ESPN's growth was "due in part to higher affil rev and lower programming and prod costs" (CABLEFAX DAILY, 8/10).
TAKING A TUMBLE TODAY: The WALL STREET JOURNAL’s Jonathan Chang reports U.S. stocks “slumped again" this morning, with all 30 of the Dow Jones components “in negative territory.” Disney was the “steepest decliner among the Dow components, tumbling 11% after the blue-chip media and entertainment conglomerate reported results that topped analyst expectations, but raised analyst concerns about decelerating advertising rate growth” (WSJ.com, 8/10). Disney shares “fell to a new 52-week low in early Wednesday trading” (HOLLYWOODREPORTER.com, 8/10). At presstime, shares of Disney were trading at $31.23, down 10.01% from yesterday's close of $34.70 (THE DAILY).