Media giant Walt Disney Co reported a 32 percent increase in profit that beat Wall Street expectations, boosted by higher spending and attendance at U.S. theme parks, and the movie box office success of "Oz the Great and Powerful."
Revenue for the company that operates cable networks, theme parks and a movie studio increased 10 percent to $10.6 billion. At the parks division, revenue gained 14 percent and operating income climbed 73 percent as resorts in Florida and California attracted more visitors and guests spent more.
Continue Reading Below
CEO Bob Iger said Disney parks drew more visitors thanks to investments in new attractions such as Cars Land at Disneyland Resort in Anaheim, California, and the expansion of Fantasyland at Walt Disney World in Orlando, Florida.
"The product that we recently put online really worked, like California Adventure and Fantasyland, and the product we had online for years and years in many respects looked better to consumers," Iger told analysts on a conference call.
Profit rose 8 percent at the media networks unit, the company's largest division, helped by higher advertising and fees from cable operators at sports network ESPN.
Those strong performances helped offset a poor showing by the broadcasting division.
Operating income declined by 40 percent at the broadcasting unit, as the ABC television network brought in less advertising revenue amid a ratings slump and higher programming costs. Iger said he wanted a stronger primetime lineup at the channel, with more shows produced by ABC rather than other studios.
"We could use a few more hits, and certainly a few more hits that we own," he said.
Overall, net income increased 32 percent from a year earlier to $1.5 billion for January through March, Disney said on Tuesday. Adjusted earnings per share rose 36 percent to 79 cents, beating Wall Street expectations of 77 cents, according to Thomson Reuters I/B/E/S.
Disney's movie studio recorded a profit of $118 million, compared with a loss a year earlier from the box office bomb "John Carter." This year, the "Wizard of Oz" prequel lifted second-quarter results.
The studio also is looking at a big third quarter with current blockbuster "Iron Man 3," a Marvel superhero sequel that has grossed $711 million around the world since its release.
Disney is working on sequels to the "Star Wars" franchise after last year's $4 billion purchase of Lucasfilm. The company is also developing "Star Wars" properties for television and parks, Iger said.
The interactive gaming division recorded a loss of $54 million. Iger had set a goal of turning the unit profitable in 2013. He told analysts it was now "doubtful" the unit will break even this year after the company delayed the release of its Infinity games and toys initiative to August from June. Infinity "is going to help drive profitability for fiscal 2014," he said.
Shares of Disney fell to $65.28 in after-hours trading, a 1.2 percent drop from their earlier close of $66.07 on the New York Stock Exchange.
Investors likely were taking profits after the shares had run up more than 30 percent this year, Evercore Partners analyst Alan Gould said. "It's selling into strength," Gould said. "The only weak area was the broadcasting. I don't see anything negative here."
(Reporting by Lisa Richwine and Liana Baker; Editing by Bernard Orr)