Disney Earnings Jump 19% to $2.2B in Quarter

Higher costs and lower operating income for cable nets
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The Walt Disney Co. reported that its profits jumped in its fiscal first quarter despite higher costs and lower earnings at ESPN.

Net income was $2.18 billion, or $1.27 cents a share, up 19% from $1.84 billion, or $1.03 a share, a year ago.

Revenue rose 9% to $13.4 billion.

“This was yet another incredibly strong quarter for our company, with diluted EPS up 23% driven by record revenue as well as significant growth in segment operating income,” CEO Bob Iger said.  “Our results once again reflect the strength of our brands and high quality content and demonstrate that our proven franchise strategy creates long-term value across all of our businesses.”

Operating income for Disney’s Media Networks group, which includes ESPN and ABC, was up 3% as revenues grew 11%.

Operating income at the cable networks was down 2%. ESPN had higher programming and production costs that offset rises in affiliate fees. ESPN ad revenues were down because of lower ratings. Ad revenues were up at ABC Family.

At the broadcasting unit, operating income was up 35% to $240 million. Revenues were up 11% to $1.69 billion. Affiliate revenues grew and program sales of Criminal Minds, Scandal and Once Upon a Time, were up from a year ago. Ad revenue was lower due to fewer units sold at the network. At the stations, ad revenues were up because of political advertising and stronger primetime rates.

Disney had a 20% gain in operating income at its Parks and Resorts segment, a 33% increase in Studio Entertainment, and a whopping 46% increase in consumer products largely from Frozen merchandise.

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