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TheStreet Open House

The Walt Disney Company Reports Fourth Quarter And Full Year Earnings For Fiscal 2013

Stocks in this article: DIS

The Walt Disney Company (NYSE: DIS) today reported earnings for its fourth quarter and fiscal year ended September 28, 2013. Diluted earnings per share (EPS) for the quarter increased 13% to $0.77 from $0.68 in the prior-year quarter. For the year, diluted EPS increased 8% to $3.38 from $3.13 in the prior year. Excluding certain items affecting comparability, EPS for the year increased 10% to $3.39 compared to $3.07 in the prior year. For the quarter, items affecting comparability had no net effect on year-over-year growth.

“We’re extremely pleased with our results for Fiscal 2013, delivering record revenue, net income and earnings per share for the third year in a row,” said Robert A. Iger, Chairman and CEO, The Walt Disney Company. “It was another great year for the Company, both creatively and financially, and we remain confident that we are well positioned to continue our strong performance and drive long-term shareholder value.”

The following table summarizes the fourth quarter and full year results for fiscal 2013 and 2012 (in millions, except per share amounts):

               
Quarter Ended Year Ended

Sept. 28,2013

   

Sept. 29,2012

Change  

Sept. 28,2013

     

Sept. 29,2012

Change
Revenues $ 11,568 $ 10,782 7 % $ 45,041 $ 42,278 7 %
Segment operating income (2) $ 2,484 $ 2,339 6 % $ 10,724 $ 9,964 8 %
Net income (1) $ 1,394 $ 1,244 12 % $ 6,136 $ 5,682 8 %
Diluted EPS (1) $ 0.77 $ 0.68 13 % $ 3.38 $ 3.13 8 %
Cash provided by operations $ 2,735 $ 1,535 78 % $ 9,452 $ 7,966 19 %
Free cash flow (2) $ 1,748 $ 602

>100

%

$ 6,656 $ 4,182 59 %
 
 

(1)

Reflects amounts attributable to shareholders of The Walt Disney Company, i.e. after deduction of noncontrolling interests.
 

(2)

Aggregate segment operating income and free cash flow are non-GAAP financial measures. See the discussion of non-GAAP financial measures that follows.
 

SEGMENT RESULTS

The following table summarizes the full year and fourth quarter segment operating results for fiscal 2013 and 2012 (in millions):

                   
Quarter Ended Year Ended

Sept. 28,2013

   

Sept. 29,2012

Change

Sept. 28,2013

   

Sept. 29,2012

Change
Revenues:
Media Networks $ 4,946 $ 4,881 1

%

$ 20,356 $ 19,436 5 %
Parks and Resorts 3,716 3,425 8 % 14,087 12,920 9 %
Studio Entertainment 1,506 1,402 7 % 5,979 5,825 3 %
Consumer Products 1,004 883 14 % 3,555 3,252 9 %
Interactive   396   191  

>100

%

    1,064     845   26 %
$ 11,568 $ 10,782   7

%

  $ 45,041   $ 42,278   7 %
Segment operating income (loss):
Media Networks $ 1,442 $ 1,571

(8

)%

 

$ 6,818 $ 6,619 3 %
Parks and Resorts 571 497 15

%

 

2,220 1,902 17 %
Studio Entertainment 108 80 35

%

 

661 722 (8

)%

Consumer Products 347 267 30

%

 

1,112 937 19 %
Interactive   16   (76 ) nm     (87 )   (216 ) 60 %
$ 2,484 $ 2,339  

6

%

 

  $ 10,724   $ 9,964   8 %
 

Media Networks

Media Networks revenues for the quarter increased 1% to $4.9 billion and segment operating income decreased 8% to $1.4 billion. For the year, revenues increased 5% to $20.4 billion and segment operating income increased 3% to $6.8 billion. The following table provides further detail of the Media Networks results (in millions):

             
Quarter Ended Year Ended

Sept. 28,2013

   

Sept. 29,2012

Change

Sept. 28,2013

   

Sept. 29,2012

Change
Revenues:
Cable Networks $ 3,573 $ 3,535 1 % $ 14,453 $ 13,621 6 %
Broadcasting   1,373   1,346 2

%

  5,903   5,815 2 %
$ 4,946 $ 4,881 1

%

$ 20,356 $ 19,436 5 %
Segment operating income:
Cable Networks $ 1,284 $ 1,379 (7

)%

$ 6,047 $ 5,704 6 %
Broadcasting   158   192 (18

)%

  771   915 (16

)%

$ 1,442 $ 1,571 (8

)%

$ 6,818 $ 6,619 3 %
 

Cable Networks

Results for the Quarter

Operating income at Cable Networks decreased $95 million to $1.3 billion for the quarter. The decrease in operating income was driven by a reduction of $172 million in the recognition of previously deferred ESPN affiliate fee revenues related to annual programming commitments. Absent this impact, operating income would have increased by $77 million driven by affiliate fee contractual rate increases at ESPN and the domestic Disney Channels and higher advertising revenue at ESPN, partially offset by higher programming and production costs. ESPN advertising revenues increased primarily due to an increase in units delivered and higher rates. The increase in programming and production costs was due to the addition of new college football rights, contractual rate increases for NFL, Major League Baseball (MLB) and college football rights and more episodes of original programming at the domestic Disney Channels.

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