Strong performances from its US theme parks and a slate of movies that included its recent hit Oz: The Great and Powerful powered Walt Disney earnings past expectations in the second quarter.
The third quarter is also shaping up well for Disney after it released the biggest film hit of the year. Iron Man 3, starring Robert Downey Jr, has already grossed more than $700m around the world after only one week on release, the company said.
The parks division, which operates Disney’s attractions in California and Florida, and parks in France and Japan, was the standout performer in the second quarter, lifted by an improving US economy. Higher guest spending, more hotel bookings – and the launch of the Disney Fantasy cruise ship – fuelled operating income at the parks, which rose from $222m to $383m.
“Obviously, our parks and resorts had a great quarter that was helped a lot by some of our new investments notably at Disneyland and in Florida but also our new cruise ship and investments in Hong Kong,” Bob Iger, Disney’s chief executive, told CNBC.
Most of Disney’s other divisions reported healthy gains, with profits also up sharply at its consumer products unit. However, operating income fell sharply at Disney’s media networks as the ABC television network was hit by a decline in advertising revenues, which the company said was a consequence of lower rated programmes.
Mr Iger said Disney was “reasonably bullish” about advertising prospects for the rest of the year.
Disney’s interactive division was another straggler – the unit has never made a profit – although the company this week announced a potentially lucrative deal with Electronic Arts to develop a new range of games based on Star Wars characters and storylines.
Disney acquired Lucasfilm, which owns the rights to Star Wars, last year in a deal worth $4bn. It has announced plans for three new films in the series, with the first to be directed by JJ Abrams.
Revenues across the group rose from $9.6bn to $10.55bn, while net income rose from $1.22bn to $1.62bn. Earnings per share comfortably beat consensus analyst estimates of $0.77, rising from $0.63 to $0.83.
Disney’s market capitalisation recently passed $100bn for the first time. The shares were up 1.5 per cent to $66.07 in after-hours trading, giving the company a market value of close to $120bn. Mr Iger attributed the strong second-quarter performance to “the strength of our brands and the value of our high-quality creative content”.