Fourth Quarter Earnings and Executive Shakeups
It’s that time again, of year again, The Walt Disney Company has announced fourth quarter earnings. And revenues are up!
Walt Disney (NYSE:DIS) reported fiscal Q4 EPS of 46 cents, ex-items, topping consensus estimates of 41 cents.
Revenues in the quarter rose 4% year-over-year to $9.87 billion, and came in ahead of consensus estimates of $9.29 billion.
“Although last year was a difficult one due in part to the weak global economy, I’m pleased with the way our businesses have responded to the downturn,” said President and CEO Robert A. Iger.
“We’ve stayed focused on our long-term strategy, efficiently managed costs, and continued to invest in initiatives to deliver future growth. We also have adapted our organization to respond to and take advantage of the changes taking place in our businesses and will continue to do so as we position Disney to thrive for years to come.”
Further earnings breakdowns:
Walt Disney Co. (DIS) said Thursday that fiscal fourth-quarter profits rose 18%, driven by strength at its cable networks, and its key theme parks division showed signs of improvement.
The results followed news of a dramatic management shake-up in which Disney said Chief Financial Officer Tom Staggs would switch positions with the head of its parks division, Jay Rasulo. The unusual swap is the second high-level management change in two months.
Some company observers suggest the move may portend a test to select a CEO successor to Iger, 58 years old; however, people close to the company said the job swap did not mean that.
On the company’s earnings conference call, Iger said, “It’s incredibly valuable to have executives gain experience in different parts of the company.”
For the quarter ended Oct. 3, Disney reported a profit of $895 million, or 47 cents a share, up from $760 million, or 40 cents a share, a year earlier. The latest quarter, which had one more week than a year ago, included gains from the merger of Lifetime Entertainment Services and A&E Television Networks as well as $166 million in restructuring and impairment charges.
Excluding items, earnings rose to 46 cents a share from 44 cents. Revenue rose 4.5% to $9.87 billion. Analysts’ estimates were for per-share earnings of 41 cents on revenue of $9.29 billion, according to a poll by Thomson Reuters.
Following the better-than-expected results, Disney shares gained 2.2% to $29.70. The stock, which reached its 52-week high last month, has almost doubled from a seven-year low in March.
Disney’s media networks segment posted higher sales and earnings on strong growth at cable channels ESPN and ABC Family; meanwhile, its parks division showed resilience and stability in the face of the economic downturn, UBS analyst Michael Morris said.
Disney’s theme-park division, which accounts for about 30% of overall revenue, saw a 17% drop in profit as revenue slid 4.2%. Disneyland ended discounts in August and has raised ticket prices, while Walt Disney World continues to offer deals. Last week, the Chinese government approved a planned theme park in Shanghai, which could lead to one of the largest foreign investments in that country.
Staggs said hotel bookings for 2010 at the company’s theme parks division are down 5% from a year ago. The decline reflects the continuing economic slump, but consumers are also booking vacations closer to their date, Staggs said.
“We will continue to gauge the market and use promotions when we feel it’s appropriate,” Staggs said. Fourth-quarter attendance at its parks division was up 3%, excluding an extra week of operations that affected comparisons to last year.
Profit at the ABC broadcast network and its cable stations, including ESPN and the Disney Channel, climbed 26% on a 14% gain in revenue. Cable networks’ earnings climbed 19%, and broadcasting returned to black ink.
The film and TV production studio reported an operating loss, following its third-quarter loss, which was the first since 2005. Revenue rose 3%. On Wednesday, Disney said it would overhaul the way its studio markets and distributes films, part of an effort to adjust to rapidly shifting audience habits.
Like other big media companies, Disney has been hurt by sharp drops in advertising, and its movie studio has seen lower DVD sales and lackluster box-office performance. Attendance and spending fell at its theme parks during the recession. But in August, the company went on offense, agreeing to buy Marvel Entertainment Inc. (MVL), owner of such comic book heroes as Iron Man and Captain America, for $4 billion as part of its effort to attract young boys to its products.
Meanwhile, the executive shakeups have continued, with Tom Staggs and Jay Rasulo switching jobs!
Robert Iger, chief executive of The Walt Disney Co. (DIS), said Thursday that the company’s management shakeup will help expand the experience of its leadership and make the company more competitive.
The company announced that its chief financial officer, Tom Staggs, will swap jobs with Jay Rasulo, now the head of its parks and resorts division.
“It’s incredibly valuable to have executives gain experience in different parts of the company,” Iger said on a conference call following the company’s fiscal fourth-quarter release.
The shakeup appears to be a test that may portend succession plans for Iger. It also comes amid other management changes at Disney that appear designed to help the company improve cooperation between its divisions and better position itself for the digital shift that is roiling the media industry.
The company recently installed former Disney Channel head Rich Ross as chairman of Walt Disney Studios. Former Disney Studios Chairman Dick Cook departed the company in September, and Miramax Films President Daniel Battsek left last month.
