The Walt Disney Company
) posted third-quarter fiscal 2013 earnings of $1.03 per share
that came in line with the Zacks Consensus Estimate and rose
approximately 2% year over year. Including one-time items,
earnings remained flat at $1.01 per share.
Revenue came in at $11,578 million, up 4% year over year but
fell short of the Zacks Consensus Estimate of $11,669 million.
Total segment operating income increased 4% to $3,351 million,
reflecting strong performance of the Parks and Resorts and Cable
revenue elevated 5% year over year to $5,352 million, reflecting
an increase of 8% in Cable Networks to $3,884 million.
Broadcasting revenue remained almost flat at $1,468 million
during the quarter.
The segment's operating income marked an increase of 8% to
$2,300 million boosted by a 12% jump in Cable Networks operating
income to $2,087 million, which reflected higher affiliate
revenue at ESPN, A&E Television Networks (AETN) and the
domestic Disney Channels. This was partially offset by declines
at ABC Television. Broadcasting operating income plunged 21% to
$213 million, primarily due to decline in program sales and lower
advertising revenue coupled with increased primetime programming
Parks and Resorts
revenue rose 7% to $3,678 million, while the segment's operating
income increased 9% to $689 million, reflecting higher revenue
from domestic parks and resorts.
Disney remains focused on deploying its capital toward
expanding its Parks and Resorts business, and in turn, enhancing
its markets and creating long-term growth opportunities.
Management stated that so far in the fourth quarter of fiscal
2013, domestic resort reservations are pacing up 3%, while
booking rates are up 4% compared with the prior year.
revenue dipped 2% to $1,590 million, while operating income fell
36% to $201 million, reflecting a decline in global theatrical
distribution results and adverse impact of the pre-release
marketing expenses for
The Lone Ranger
. However, the company's big-budget
'The Lone Ranger'
failed to impress the audience for which it expects to register
loss between $160 million and $190 million in the fourth
revenue increased 4% to $775 million, while segment operating
income rose 5% to $219 million, reflecting gains at Merchandise
Licensing and retail business.
revenue for the quarter decreased 7% to $183 million, while
operating loss widened to $58 million compared with a loss of $42
million in the prior-year quarter. The decline reflected lower
console game sales and a decrease in the social games
Other Financial Details
During the quarter, Disney generated free cash flow of $2,723
million, up 27% year over year. The company ended the quarter
with cash and cash equivalents of $3,932 million, borrowings of
$12,784 million, and shareholders' equity of $43,536 million,
excluding non-controlling interest of $2,371 million.
Strong cash flow generation poise the company well to enhance
shareholders value through share repurchases. During the reported
quarter, it bought back 12.6 million shares for approximately
$800 million. Fiscal year-to-date, Disney bought back 57 million
shares worth approximately $3.2 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 its operating margins.
The company's content distribution agreements with
), Cox Communications and
Charter Communications, Inc
) strengthened Disney's multichannel subscription model by adding
more platforms to deliver its content.
Moreover, we believe ESPN's strong performance is likely to
boost the results of the segment as it remains the favorite
destination of sports lovers and has the right mix of exclusive
sporting licenses with top sporting leagues.
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