Disney's Smallest Unit Shows Outsized Growth
The platform has helped the interactive unit to turn a profit, after once being a loss-bearing unit. In its fiscal 2013 earnings report, Disney posted revenue of $45.0 billion, an increase of 7%. Company operating income increased 8% to $10.7 billion. The company's interactive unit saw a 26% increase in revenue, the largest growth for all units. The segment made up less than 2% of total revenue, but continues to show impressive growth. Disney Interactive saw a full year operating loss of $0.10 billion, a 60% improvement from the prior year.
In the fourth quarter, Disney Interactive posted revenue of $400 million. This was an improvement of over 100% from the prior year and represented over 3% of total company revenue in the quarter. More impressively, the business segment posted a quarterly profit of $20 million, compared to a loss of $80 million in the prior year. This is a trend that is likely to continue as the segment sees expansion packs post strong sales.
After an impressive 50% increase in Disney's share price through 2013, shares are up a tiny 1% in 2014. With strong growth coming from the company's Marvel and Star Wars acquisitions, shares should see stronger returns going forward. Disney's parks, media, and consumer assets will continue to grow. The growth of the interactive business segment is the icing on the top to this great media company that should already be in your portfolio.
At the time of publication, the author had no positions in any of the stocks mentioned.