Walt Disney reported second-quarter profit that beat analysts' estimates, bolstered by improving results at its theme-park and merchandise units in a period that lacked a major movie blockbuster.
Earnings at the world’s largest entertainment company totaled $1.23 a share excluding some items, according to a statement Tuesday. That compares with the $1.10-a-share average of analysts’ estimates.
Sales rose 7 per cent to $12.5 billion, above the $12.3 billion average projection.
Price increases in California and Florida boosted profit at Disney’s theme parks unit by 24 per cent. The company is benefiting from investments made during leaner years to attract more guests in an improved economy.
A 32 per cent rise in consumer-products profit also helped counter a drop at the film unit, which was churning out DVDs of the hit Frozen a year ago, and rising expenses at ESPN.
Disney gained 2.3 per cent to $113.67 in early trading. The shares, which were little changed on Monday, have advanced 18 per cent this year to record levels. Under chief executive Robert Iger, the company acquired Pixar, Marvel and Lucasfilm and, with a revived Disney Animation, they're providing characters that can be used for everything from theme-park attractions to pajamas.
Frozen, released in late 2013, helped the company sell more toys. Profit at the consumer-products unit rose to $362 million, on a 10 per cent increase in sales, to $971 million.
At the theme-parks unit, where Disney has been investing in new attractions, the company in February raised the price of a daily admission to its Magic Kingdom Resort in Orlando, Florida above $100. Profit at the division expanded to $566 million, on a 13 per cent rise in sales.
Rising costs ate into earnings at the company’s largest division, Media Networks, which includes ESPN, the Disney Channel and ABC. While sales rose 13 per cent to $5.81 billion, operating income dropped 2 per cent.
Disney blamed higher programming and production costs at ESPN, which pays billions for rights to air live sporting events. Profit jumped 90 per cent at ABC, thanks to higher affiliates fees and advertising revenue.
Disney, which typically reports quarterly results after markets close, moved its earnings announcement to Tuesday morning to allow its executives to attend the funeral of Survey Monkey chief executive David Goldberg, who died unexpectedly over the weekend.
Mr Goldberg's wife, Facebook chief operating officer Sheryl Sandberg, is a Disney board member. – Bloomberg