Walt Disney Company (The) (DIS)

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Walt Disney (DIS)

Q4 2012 Earnings Call

November 08, 2012 5:00 pm ET


Lowell Singer - Senior Vice President of Investor Relations

Robert A. Iger - Chairman, Chief Executive Officer, President and Member of Executive Committee

James A. Rasulo - Chief Financial Officer and Senior Executive Vice President


Michael Nathanson - Nomura Securities Co. Ltd., Research Division

Alexia S. Quadrani - JP Morgan Chase & Co, Research Division

Benjamin Swinburne - Morgan Stanley, Research Division

Jessica Reif Cohen - BofA Merrill Lynch, Research Division

Todd Juenger - Sanford C. Bernstein & Co., LLC., Research Division

Douglas D. Mitchelson - Deutsche Bank AG, Research Division

Jason B. Bazinet - Citigroup Inc, Research Division

Anthony J. DiClemente - Barclays Capital, Research Division

David W. Miller - Caris & Company, Inc., Research Division

Michael Senno - Crédit Suisse AG, Research Division

Vasily Karasyov - Susquehanna Financial Group, LLLP, Research Division



Welcome to The Walt Disney Company's Fiscal Full Year and Fourth Quarter 2012 Earnings Conference Call. My name is Ellen, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the call over to Mr. Lowell Singer, Senior Vice President, Investor Relations. Mr. Singer, you may begin.

Lowell Singer

Okay. Thank you, Ellen, and good afternoon, everyone. Welcome to the Walt Disney Company's Fourth Quarter 2012 Earnings Call. Our press release was issued about 45 minutes ago and is available on our website at www.disney.com/investors. Today's call is also being webcast, and we will post the webcast and a transcript of the call to our website later.

Joining me in Burbank for today’s call are Bob Iger, Disney's Chairman and Chief Executive Officer; and Jay Rasulo, Senior Executive Vice President and Chief Financial Officer. Bob will lead off, and Jay will make some comments, and then of course, we'll be happy to take your questions. So with that, I'll turn it over to Bob, and we'll get started.

Robert A. Iger

Thank you, Lowell, and good afternoon, everyone. I'm very happy to report that Disney has delivered yet another record annual performance, driven by improved results in each of our businesses. In the fiscal 2012 year, Disney achieved record revenue, net income and earnings per share. Net income was up by 18% for the year on a 3% increase in revenue, and our earnings per share adjusted for comparability were up 21% over last year.

I'm also very pleased with our fourth quarter results, which were primarily driven by growth at Cable Networks and Parks and Resorts. Net income grew by 14%, and revenue was up 3% for the quarter. And our EPS for Q4 adjusted for comparability grew 15% to $0.68. These results once again demonstrate our ability to grow earnings in the near term while investing for the long term, and we're obviously proud of our performance.

Before I get into the highlights of fiscal 2012, I just want to mention the tremendous creative resurgence we are seeing at Disney Animation. Building on the success of Tangled, our newest release, Wreck-It Ralph, just had a phenomenal opening weekend, bigger than any previous Disney animated movie. With $58.6 million in domestic box office so far, Wreck-It Ralph continues the creative momentum that started with our acquisition of Pixar. Pixar deal brought us more than just great Pixar movies. It also reinvigorated our entire animation pipeline led by the great team of John Lasseter and Ed Catmull.

Looking back, fiscal 2012 was a great year for Disney by every measure: creatively, financially and strategically. Marvel had a fantastic year, capped by the extraordinary success of The Avengers, which became the world's third highest grossing movie of all time, a global phenomenon and an incredibly important franchise for us.

Pixar also generated a great deal of value for us this year from the opening of the phenomenal Cars Land to transform Disney California Adventure into an extraordinary park, to the opening of BRAVE, which became Pixar's 13th consecutive movie to debut #1 at the box office.

We opened 2 new lands in Hong Kong Disneyland, completed the first phase of our historic multiyear expansion of Fantasyland in Walt Disney World and made significant progress in Shanghai to keep development on track to open by the end of 2015.

With the addition of the Disney Fantasy last March, we've now more than doubled our cruise business, and this year, we were named the #1 large cruise line by readers of Condé Nast Traveler magazine.

ESPN was a strong contributor for the year as well, adding Wimbledon to its world-class sports lineup, along with higher ratings, ad sales and affiliate revenue. ESPN also solidified its position in some critical sports, including college football and basketball and major league baseball.

Disney Channels worldwide continued to be an important brand and business driver for our company, reaching approximately 425 million homes in 167 countries. In 2002, we introduced Disney Junior and Disney XD to new markets around the world and also launched our first over-the-air Disney Channel in Russia.

We also completed our strategic acquisition of UTV, making Disney India's leading -- making Disney India's leading film studio and TV producer, as well as one of the country's leading broadcasters, reaching more than 100 million viewers every week.

And looking ahead, our Shanghai development is moving into an exciting phase as the construction work starts to define the shape of things to come and our vision starts to become reality. We look forward to completing our Hong Kong Disneyland expansion, which should only enhance the park's current strong performance. And we're also very excited about the ongoing Fantasyland transformation at Walt Disney World. It's the largest expansion of the Magic Kingdom since that park opened more than 40 years ago, and it's going to be pretty spectacular.

Read the rest of this transcript for free on seekingalpha.com