Disney Earnings Beat; 'Star Wars' Spinoffs Planned
Disney posted quarterly earnings and revenue that beat Wall Street's expectations on Tuesday amid strong revenue growth in its media networks business and its theme parks. But earnings slipped from a year ago, given higher programming costs at ESPN.
And, big news "Star Wars" fans: Disney, which announced it would buy Lucasfilm last year, plans to make spinoff movies based on characters in addition to the three sequels it had previously announced, CEO Bob Iger told CNBC in an interview after the earnings report.
After the announcement, the company's shares rose in extended-hours trading. (Click here to get the latest quotes for the company's shares.)
Disney reported fiscal first-quarter earnings excluding items of 79 per share, down from 80 cents a share in the year-earlier period.
Operating income at ESPN declined given higher programming and production costs which were partially offset by higher affiliate revenue.
"In ESPN's case, we had the largest program cost increase for the year in the quarter that we just announced," Iger said. "We have new distribution deals coming online, but the revenue from those deals won't hit until the second quarter."
Iger expects ESPN will deliver solid high-single digit growth for the year.
Iger also said that ABC and ESPN were affected by softer ratings in the fiscal first quarter, but said both have bounced back. "ESPN is running in the quarter around 7 percent above where they were last year and we feel much better about the advertising market now than we did during the quarter that was just announced," the Disney CEO said.
And in a sign consumers may be feeling better about the economy, Disney said that higher operating income at its domestic parks was driven by increased guest spending during the quarter.
While there was some softness in the international parks business in the fiscal first quarter, Iger told CNBC the trends for the domestic parks business for the year are quite good, noting strong bookings and pricing.
For the first quarter, net income fell 6 percent to $1.38 billion from $1.46 billion a year ago.
Revenue rose 5 percent to $ 11.34 billion from $10.78 billion.
Analysts had expected the company to report earnings excluding items of 76 cents a share on $11.21 billion in revenue, according to a consensus estimate from Thomson Reuters.
