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Walt Disney Co. Earnings Up 20 Percent

Aug 10, 2004  •  Post A Comment

Walt Disney Co. on Tuesday reported a 20 percent surge in fiscal third-quarter earnings, driven by growth at the media giant’s theme-park and cable-networks businesses.

The Burbank-based company generated a profit of $604 million, or 29 cents a share, for the three-month period ended June 30, vs. a year-earlier profit of $502 million, or 24 cents a share. Revenue climbed 17 percent to $7.5 billion.

The company said much of the growth came from Disney’s theme-park business, which posted a 32 percent increase in revenue to $2.3 billion and a 20 percent rise in operating income to $421 million.

The media giant’s cable operations were also a contributor to the quarterly results. Overall, the media networks division posted an 8 percent increase in revenue to $2.9 billion, while operating income rose 15 percent to $673 million.

Much of the growth within the media networks division was driven by higher affiliate and advertising revenue at ESPN, as well as higher affiliate revenue at the domestic and international Disney Channels. ABC Family had higher advertising revenue. Those increases offset higher programming costs at ESPN and the Disney Channel.

The company said ESPN’s affiliate-revenue growth was linked to contractual rate adjustments with cable operators, while the Disney Channel’s growth related to subscriber growth.

ABC, meanwhile, reported a 6 percent increase in revenue to $1.3 billion, while operating income sank 21 percent to $144 million. The company blamed the lower operating income number on higher programming and production costs, which offset an increase in advertising revenue.

The quarterly results reflect a $56 million one-time charge related to the pending sale of Disney’s retail stores to a prospective buyer that has signed a nonbinding letter of intent to negotiate the sale of the Disney Store chain in North America.