February 8, 2012- Walt Disney Co., the largest entertainment company in the U.S. in market value announced that its profits had increased by 12% due to growth in ESPN and other U.S. entertainment resorts.
Net income for the company increased to $1.45 billion representing $0.80 per share from the $1.3 billion and $0.68 per share recorded in the same quarter a year ago. Profits were more than analysts’ estimates that were $0.71 per share. Revenue was up less than one percent to $10.78 billion, less than estimates from analysts that averaged $11.2 billion.
Profit was driven due to higher fees charged to pay-tv operators by ESPN the most popular sports network on TV. Its theme parks were helped by increased spending by consumers during the quarter and from higher attendance and an increase in prices.
Disney stock dropped to $40.40 or 1.4% after the results were announced. This year the stock has already increased more than 9%. Profit from its cable television sector, which includes the Disney Channel and ESPN was $967 million representing a 25% increase. Last month, Disney signed a ten-year contract with Comcast Corp., the country’s largest pay-TV company.
CEO Robert Iger announced that fees from operators of pay-TV would continue to increase due to the company’s agreements with pay-TV providers like Comcast. Revenue from cable was up 8% to over $3.31 billion. Revenue from advertising at ESPN was flat due to the delay in the start of the NBA season and because a number of college football bowl games were played in January instead of December.
Profits at the theme parks and Disney resorts were up 18% to $533 million on an increase of 10% in revenue to $3.16 billion.