Disney Earnings Up

As Pixar and DreamWorks take hits due to lower-than-expected DVD sales, Disney reported a 41% gain in earnings per share for its third quarter ended July 2. The company earned $0.41 a share, compared to $0.29 a year ago. Revenues are up 3% to $7.2 billion, with net earnings posted at $851 million.

President, chief operating officer and CEO-elect Robert Iger says Disney’s strong third-quarter results are due largely to the stellar performance of its largest segment, Media Networks. Attendance at the company’s parks and resorts was also up in conjunction with the global celebration of Disneyland’s 50th anniversary.

Iger is also optimistic about the near future, stating, "Although the studio is facing a challenging environment, we are excited by such upcoming projects as Flightplan, Chicken Little and The Chronicles of Narnia. Also just ahead is the opening of Hong Kong Disneyland, which will serve as a platform for growth in the world’s most populous nation.”

Also affected by the global decline in DVD sales, Disney saw its home video business taper by 15% from last year, when Finding Nemo was flying off shelves in record numbers. Since the studio splits profits with Pixar, it too was negatively affected by the disappointing retail performance of The Incredibles. Meanwhile, Disney-owned ABC TV received a much-needed boost from recent hits such as Desperate Housewives and Lost.

There’s good news all around for Disney, which yesterday saw a drawn-out court case end in victory. A judge ruled that the company’s board of directors was not guilty of breach of fiscal responsibilities by hiring Michael Ovitz to serve as president and granting him a $140 million severance package a little more than a year later.