Walt Disney Co. (DIS) Income At Par With Analysts Estimates

Walt Disney Co. (NYSE:DIS) announced in its fourth quarter earnings report ended Sept. 27, 2014, a net income of $1.5 billion, up from $1.39 billion over the same period the previous year, garnering an earnings of 86 cents per share as opposed to 77 cents per share last year. The 8% increase, largely driven by the company’s film outfit, is within the expectations of Wall Street.

The company’s profits was driven up by the blockbuster hit “Guardians of the Galaxy”, a release from Disney’s Marvel studio which grossed $766.3 million worldwide, and “Maleficent”. The studio is credited with the rise in operating income from $108 million the previous year to $254 million this year.

The company’s media outfits, however, have trailed behind in performance. The company’s TV networks, ESPN and ABC, reported a 5% increase in revenue at $5.22 billion, which is below the $5.25 billion that analysts had expected. Walt Disney Co. (NYSE:DIS) shares fell more than 2% in extended trading after the quarterly income was reported, falling to $90.20 from $92.

Walt Disney Co. (DIS)

Brett Harris, an analyst from Gabelli & Company, attributes the decline of Disney’s shares to the low performance of the company’s cable networks, Reuters reported. Harris expects ESPN, the sports channel of Walt Disney Co. (NYSE:DIS), to recover its programming expenditures by charging its affiliates with higher rates.

In the company’s quarterly conference call on Thursday, Walt Disney Co. (NYSE:DIS) Chief Executive Bob Iger reaffirmed the company’s media outfits’ reliance on the current pay TV model system of traditional cable and satellite operators, but also noted that Disney will experiment in online offerings such as streaming of NBA games by ESPN.

On the other hand, the company’s parks and resorts division reported increased attendance in its theme parks, translating to a 20% increase in profits during the quarter at $687 million from $571 million last year.

Revenue is up by 7% by the quarter, from $11.56 billion last year to $12.39 billion this year, higher than analysts expectations of $12.37 billion.

This article has been written by Nonito Guntan.

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