Nov 6, 2014 5:51 PM
Disney movies drive 4th qtr; Toy Story 4 coming
The Associated Press
NEW YORK (AP) Movie heroines and superheros were the stars of The Walt Disney Cos. fourth-quarter results on Thursday, as the success of animated tale "Frozen" and Marvel movie "Guardians of the Galaxy" helped revenue surpass expectations.
Disney Studios has had a string of hits that is likely to continue with the first of its annual "Star Wars" movie launching next year, titled "The Force Awakens." The company also announced Thursday that Toy Story 4 will hit theaters in 2017, directed by John Lasseter, who created the blockbuster franchise and directed the first two movies.
In a call with analysts, CEO Bob Iger said Disney's movie and TV offerings help it compete in the "new golden age for content."
"The studio business has been a tremendous content engine driving opportunities across the country," he said. He said the five Marvel movies that Disney has released since acquiring the brand in 2009 have averaged $1 billion in global box office receipts.
Movie studios, TV networks and cable and satellite providers alike are grappling with a changing media industry as more people watch TV and movies online and via streaming services like Netflix and Hulu. HBO made waves recently by saying it would offer a standalone streaming service late next year.
There has been some speculation that Disney's ESPN network might do something similar since it is one of the most popular channels. In a call with investors, however, Iger said that cable channel bundles are still the best choice for consumers. He said there are 101 million households with a cable or satellite subscription in the U.S., down only slightly from 101.5 million a year ago.
"While clearly the economy has had some impact over the last few years and we do see the millennials seem to be becoming subscribers a little bit later than perhaps they used to, we just feel that when you look at the quality of what's offered, meaning the number channels in the programming across those channels, and you consider the price, that is likely to remain dominant for a long time," he said.
He added that he didn't think there is a need to create a standalone ESPN streaming service since that might erode the popularity of cable bundles.
"To do it at a point where you are endangering your own business model which is already facing a fair amount of challenge because of all the changing dynamics of the media landscape, it doesn't make sense to us right now," he said.
Disney Studios had the strongest results among the media company's divisions. Revenue in that unit climbed 18 percent to $1.78 billion, with growth both in theatrical distribution due to "Maleficent" and "Guardians of the Galaxy" and home entertainment due to the continuing popularity of "Frozen" and "Captain America."
Other segments reported higher revenue as well. The Burbank, California company said revenue from media and cable networks rose 5 percent to $5.22 billion. Revenue from parks and resorts rose 7 percent to $4 billion. Consumer product revenue rose 7 percent to $1.07 billion.
Overall revenue rose 7 percent to $12.39 billion, ahead of expectations of $12.36 billion.
Fourth-quarter net income rose 8 percent to $1.5 billion, or 87 cents per share. Excluding one-time items, net income matched analyst expectations of 89 cents per share.
The stock dipped less than 2 percent after-hours, having closed at an all-time high of $92 before the report. The stock has been on a dramatic run, nearly doubling in the last two years.