Disney Squeaks By Estimates
Updated from 4:36 p.m. EST
Disney (DIS) says it has yet to feel any ill effects from the U.S. housing downturn on its parks business, which is closely watched as a barometer of consumer confidence.
"So far, we're not seeing any effects from everything that's going on in the economy," said Disney CEO Bob Iger on a conference call with analysts that followed the company's fourth-quarter earnings release Thursday. "People are not giving up their family vacations, particularly to our Disney destinations."
The Burbank, Calif.-based entertainment giant reported a 12% jump in profits for the September quarter, beating expectations on Wall Street. Strength in Disney's media networks division drove the results, and the weak dollar benefited its domestic theme parks as vacationers opted to avoid high prices abroad.Analysts are watching park attendance closely at Disney, given widespread concerns about the U.S. economy that are weighing on the stock market amid an epic housing downturn. "We've had some decent growth in international visitation [at the theme parks division]," said Iger. "By and large, our tourists are probably staying closer to home than they would have been if the dollar was stronger in comparison to foreign currencies." Disney reported fourth-quarter net income of $877 million, or 44 cents a share, up from $782 million, or 36 cents a share, a year earlier. Excluding one-time items, Disney earned 42 cents a share for the quarter, beating Wall Street's expectations by a penny, according to the average estimate reported by Thomson First Call. On its top line, Disney logged revenue of $8.93 billion, up 3.2% from last year's $8.65 billion. Analysts, on average, had expected revenue of $8.97 billion. Fourth-quarter revenue at Disney's media networks division rose 14% to $4 billion, while operating income at the segment jumped 25% to $1.1 billion. The division includes its broadcast network, ABC, and its cable networks, including ESPN. Currently, Disney's TV properties are grappling with an industry-wide strike called by movie and TV writers represented by the Writers Guild of America. Its film studios are affected as well, but the strike has more immediate consequences for TV shows, like ABC's Jimmy Kimmel Live and Desperate Housewives. Parks revenue rose 10% to $2.8 billion, while the unit's income was up 9% to $430 million. Disney's film studios posted a 24% decline in revenue to $1.5 billion and a 21% drop in operating income to $170 million, reflecting in part the strength of Pirates of the Caribbean: Dead Man's Chest in the prior-year period. Consumer products revenue rose 5% to $590 million and operating income was up 10% to $153 million. "We've delivered another year of outstanding financial results, powered by across-the-board creative strength," said Disney in a press release. "We believe our strong brands, combined with high-quality creative content and our ability to promote and distribute that content across multiple businesses and platforms, gives us a unique ability to continue delivering growth and value to our shareholders."
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