Disney Profit Rises 12%

(NewsCore) - Walt Disney Co. said Tuesday that its fiscal first-quarter profit rose 12 percent due to higher fees paid to its ESPN cable network and improved results at its US theme parks and resorts.

The entertainment giant said it earned $1.46 billion, or 80 cents a share, in the period ended Dec. 31, compared with a profit of $1.3 billion, or 68 cents a share, in the same period a year earlier. Revenue rose one percent to $10.78 billion.

Disney was expected to post a profit of 75 cents a share, excluding stock-option payments, on revenue of $11.19 billion, according to a consensus poll of analysts by Thomson Reuters.

Earnings at the company's cable networks, ABC and its TV stations rose 12 percent to $1.2 billion. Operators of cable, satellite and fiber-television systems had to fork over higher fees to ESPN for permission to carry its sports programming, due to contractual rate increases. Sports programs are one of the best ways to reach men across all age demographics.

On a conference call, CEO Bob Iger declined specific comment Tuesday on a reported collaboration between ABC News and Spanish-language broadcaster Univision, but said the continued growth of ABC News remains a goal for Disney.

The CEO reiterated his view that so-called a la carte cable services are unlikely to be offered on a broad basis. He said most consumers still want large packages of cable channels because of the variety they offer.

Iger also said the industry's cost structure could not sustain so many channels under an a la carte system, adding that many customers would pay just about what they do now but receive fewer channels.

Rising sports rights costs have led many to speculate that a related increase in cable rates would cause many consumers to cancel their subscriptions unless they could choose only the channels they want.

At Disney's parks and resorts, operating income rose 18 percent on greater guest spending and attendance at the company's domestic locations, as well as higher earnings at Disney Cruise Line.

Earnings at the company's movie and TV studios rose 10 percent, though revenue fell 16 percent. Theatrical film results around the world showed improvement, mostly due to lower distribution and marketing costs. Revenue fell due to "fewer Disney branded titles in wide theatrical release in the current quarter," the company explained, along with decreased DVD sales.

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