Driven by robust performance of Interactive, Consumer Products
as well as Parks and Resorts businesses, media giant
The Walt Disney Company
) posted stronger-than-expected fourth and full-year fiscal 2013
earnings. The quarterly earnings came in at 77 cents, a penny
above the Zacks Consensus Estimate and up 13.2% year over year.
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For the full year, excluding certain items, earnings per share
were $3.39, a penny above the Zacks Consensus Estimate and up
10.4% year over year. Including certain items, yearly earnings
were $3.38, rising 8.0% from the past year.
Among other media conglomerates,
) reported third-quarter 2013 adjusted earnings per share of 76
cents, which came in line with the Zacks Consensus Estimate. On
the other hand,
Time Warner Inc.
) third-quarter 2013 earnings of $1.01 per share easily beat the
Zacks Consensus Estimate of 89 cents.
Revenues came in at $11,568 million, up 7.3% year over year.
Moreover, it surpassed the Zacks Consensus Estimate of $11,449
million. Full-year revenues were $45,041 million, up 6.5% from
the previous year and surpassing the Zacks Consensus Estimate of
Total segment operating income increased 6.2% to $2,484 million,
based on strong performance at the Parks and Resorts, Studio
Entertainment and Consumer Products divisions.
revenues increased 1.3% year over year to $4,946 million, driven
by 1.1% rise in
to $3,573 million and 2.0% rise in
to $1,373 million during the quarter.
The segment's operating income decreased 8.2% to $1,442 million
owing to a 6.9% fall in
operating income to $1,284 million, which reflected the bringing
forward of ESPN's deferred affiliate revenues. Moreover,
operating income fell 17.7% to $158 million, primarily due to
increased primetime programming costs, absence of syndication
sales pertaining to hit series like Castle and Wipeout and higher
marketing expenses for the fall season, partly offset by
increased advertising and affiliate revenues.
Parks and Resorts
revenues rose 8.5% to $3,716 million, while the segment's
operating income increased 14.9% to $571 million. The rise was
due to revenue growth from domestic parks and resorts and
increase in vacation club ownership sales and royalty revenues
from Tokyo Disney Resort, partly offset by lackluster performance
at Disneyland Paris.
Disney remains focused on deploying its capital toward expanding
its Parks and Resorts business, and thereby increasing its market
share and creating long-term growth opportunities. The company
announced that it was going to unveil Marvel-themed attraction at
Hong Kong Park. Moreover, the Shanghai resort is likely to be
completed by 2015.
Management stated that so far in the first quarter of fiscal
2014, domestic resort reservations have remained flat year over
revenues rose 7.4% to $1,506 million, while operating income
increased 35% to $108 million. The improvement was driven by
higher theatrical results, increased television/subscription
video on demand (TV/SVOD) distribution, partly offset by a lower
home entertainment and higher film impairments.
revenues increased 13.7% to $1,004 million, while segment
operating income rose 30.0% to $347 million, reflecting gains
from Merchandise Licensing and the publishing business.
revenues for the quarter rose over twofold to $396 million, while
operating profit was $16 million against a loss of $76 million in
the prior-year quarter. The increment reflected higher console
game sales (especially propelled by launch of Disney Infinity)
and growing Japan mobile business.
Other Financial Details
During the fiscal year 2013, Disney generated free cash flow of
$6,656 million, up 59.2% year over year. The company ended the
quarter with cash and cash equivalents of $3,931 million,
borrowings of $12,776 million and shareholders' equity of $45,429
million, excluding non-controlling interest of $2,721 million.
Strong cash flow generation positions the company favorably to
enhance shareholders' value through share repurchases. In the
reported quarter, Disney bought back 21.8 million shares for
approximately $1.4 million. For Fiscal 2013, it repurchased 71.3
million shares worth approximately $4.1 billion.
This Zacks Rank #3 (Hold) company remains well positioned to
drive revenue growth through its strategic initiatives. The
company's investments in its core businesses are also aimed at
expanding operating margins.
Disney announced two major developments related to the Marvel and
Lucas films during the earnings release. The company has
scheduled the official release date for Star Wars Episode VII on
Dec 18, 2015.
Moreover, the company announced a deal with
) to create multiple live action series and a mini series event.
According to the deal, Marvel TV will collaborate with ABC
Television Studios to develop four series based on Marvel's
popular characters. Both these developments will likely boost
Disney's financials, going forward.