Revenue increased at Disney’s movie studio and parks resulted to a 32 percent increase in net income during the first three months of the year. The results were above the expectations made by analysts. It showed that the company’s investments in multiple theme park upgrades and a new cruise ship last year are now starting to pay off.
Net income went up to $1.51 billion or 83 cents per share. Excluding one-time items, adjusted earnings came to 79 cents a share. It was above the 77 cents estimated by analysts polled by FactSet. The company’s revenue increased 10 percent to $10.55 billion, which was also above the $10.49 billion forecasted by analysts.
Parks and resorts got an increase in revenue of 14 percent to $3.30 billion, which was attributed to higher attendance and guest spending at US parks in Orlando, Florida and Anaheim, California. Analysts have expected parks to step up.
Disney Fantasy cruise ship also helped the company’s bottom line. The cruise ship was launched in March 2012. Movie studio revenue went up 13 percent to $1.34 billion. It rebounded from the $200 million loss in 2012 after John Carter failed to rake in box office dollars.
Revenue from TV networks went up 6 percent to $4.96 billion. Fees from distributors resulted to higher ESPN revenues. Audiences and ad revenue dropped at broadcast network ABC.
Investments in parks dropped by almost half to $1.1 billion in the first six months of the fiscal year compared to $2.1 billion the previous year. Analysts hope that the decline in capital spending meant the company will give back more cash to shareholders via more buybacks.
Disney’s cash balance went up to $3.95 billion from $3.39 billion six months earlier. CEO Bob Iger said the company doesn’t have plans to acquire more properties in the near future. It considers increasing dividends or share buybacks.
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