Walt Disney (DIS) Tops Q4 EPS by 2c; Parks & Resorts Revs Up 8%

November 7, 2013 4:15 PM EST
(Updated - November 7, 2013 4:54 PM EST)

Walt Disney (NYSE: DIS) reported Q4 EPS of $0.77, $0.02 better than the analyst estimate of $0.75. Revenue for the quarter came in at $11.6 billion versus the consensus estimate of $11.4 billion.

Results by segment:

Media Networks - revs up about 1 percent to $4.946 billion

* 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.

Parks and Resorts - revs up 8 percent to $3.716 billion

* Results for the quarter reflected growth at our domestic parks and resorts, an increase in vacation club ownership sales and higher royalty revenue from Tokyo Disney Resort, partially offset by a decrease at Disneyland Paris.

Higher operating income at our domestic parks and resorts was primarily due to increased guest spending, attendance and occupied room nights at Walt Disney World Resort and increased guest spending at Disneyland Resort. These increases were partially offset by higher costs at both resorts and lower attendance at Disneyland Resort, which reflected the success in the prior year from the opening of Cars Land at Disney California Adventure. Increased guest spending at our domestic parks was due to higher average ticket prices, food, beverage and merchandise spending and average daily hotel room rates. Higher costs were due to spending on MyMagic+ and labor and other cost inflation.

Lower operating income at Disneyland Paris was due to lower attendance and occupied room nights, partially offset by increased guest spending. Increased guest spending reflected higher average ticket prices, merchandise, food and beverage spending and average daily hotel room rates.

Studio Entertainment - revs up 7 percent to $1.506 billion

* The increase in operating income for the quarter was primarily due to improved theatrical results and growth from television/subscription video on demand (TV/SVOD) distribution, partially offset by a decrease in home entertainment and higher film impairments. The increase in theatrical results was primarily due to the strength of Monsters University in the current quarter compared to Brave in the prior-year quarter, partially offset by the performance of The Lone Ranger in the current quarter. The increase in TV/SVOD distribution was driven by the timing of title availabilities and SVOD sales of library titles in the current quarter. Lower home entertainment results reflected decreased unit sales driven by the performance of Iron Man 3 in the current quarter compared to Marvel's The Avengers in the prior-year quarter, partially offset by lower marketing and overhead costs. Higher film impairments were driven by the write-down of The Lone Ranger in the current quarter, partially offset by a development cost write-off in the prior-year quarter.

Consumer Products - revs up 14 percent to $1.004 billion

* Higher operating income for the quarter was due to increases at our Merchandise Licensing and Publishing businesses. The increase at Merchandise Licensing was driven by the performance of Planes, Monsters University and Disney Junior merchandise. Merchandise Licensing results also increased due to the inclusion of Lucasfilm. At Publishing, higher operating income for the quarter was primarily due to international sales of books based on Disney Channel properties.

Interactive - revs up over 100 percent to $396 million

* Improved operating results for the quarter and year were due to increases at our console games and Japan mobile businesses. The increase at our console games business was primarily due to the fourth quarter release of Disney Infinity. Japan mobile results benefited from the full year impact of a licensing agreement that started in February 2012, which drove an increase in handset sales and subscribers for the year and quarter. The increases for the quarter were partially offset by a decrease at our social games business due to a favorable acquisition accounting adjustment recognized in the prior-year quarter.

For earnings history and earnings-related data on Walt Disney (DIS) click here.


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