'Frozen' Helps Disney 3Q Profit Rise 22 Percent
LOS ANGELES (AP) — Animated hit "Frozen" continued to help boost The Walt Disney Co., as the company reported third-quarter net income that rose 22 percent, topping analysts' expectations. The movie sold well at international box offices and in home video and lifted merchandise sales.
With another hit — last weekend's Marvel superhero epic "Guardians of the Galaxy" — set to be made into a series, and the first of its annual "Star Wars" movies to launch next year, the company is on track for a multi-year revival of the studio that is lifting results across its divisions.
And it comes even after Disney delayed what would have been its only Pixar film of 2014, "The Good Dinosaur." The movie, originally slated for a May release, won't come out until November 2015.
"The fact that we're doing as well as we're doing without a Pixar film probably says a lot about what's up in the future," CEO Bob Iger said on a conference call.
Since "Guardians" was released on Friday, it has pulled down more than $106 million in North America, adding to the best domestic August opening weekend ever.
This year's successes, including nearly $1 billion-gross hits "Maleficent" and "Captain America: Winter Soldier," represent a huge turnaround for the studio. Previously, it had been crippled with what seemed like annual spring write-downs on bombs such as "Prince of Persia" (2010), "Mars Needs Moms" (2011), and "John Carter" (2012).
"The studio has continued to be a real game-changer for them," said Robin Diedrich, an analyst with Edward Jones. "As you look forward we're looking to the 'Star Wars' properties and another Pixar film. And so the pipeline is pretty strong."
The Burbank, California-based company said net income in the three months through June 28 increased to $2.25 billion, or $1.28 per share, from $1.85 billion, or $1.01 per share, in the same quarter a year ago. The average estimate of analysts surveyed by Zacks Investment Research was for profit of $1.17 per share.
The company said revenue climbed 8 percent to $12.47 billion from $11.58 billion in the same quarter a year ago, beating Wall Street forecasts. Analysts expected $12.16 billion, according to Zacks.
Quarterly studio profits more than doubled to $411 million, the most of any segment. Meanwhile, the interactive unit had its fourth straight quarter of profitability on the strength of its Disney Infinity game franchise.
Disney shares rose 5 cents to $86.80 after the earnings were released. The stock is up $10.40, or 14 percent, since the beginning of the year, while the Standard & Poor's 500 index has risen 3.9 percent.
Iger said he expects the studio to keep humming for a while.
"We think we're well positioned for the studio to be a significant driver of bottom line results for the company, certainly through the next five years," he said. "I'm not sure I know what's out there that could disrupt us except for wide-scale creative failure and I certainly don't expect that."