Sales of “Avengers“, “Star Wars“, and “Frozen” merchandise delivered operating income of $348 million, a 27% increase from a year earlier.
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Disney (DIS) closed at $110.53.
A bright spot for Disney was its movie studio revenues which surged 13%, largely because of the Marvel superhero mash-up, “Avengers: Age of Ultron“, which brought in over $1.3 billion at the global box office since May.
Disney said: “Higher operating income at our domestic operations was primarily due to volume and guest spending growth, partially offset by higher costs”. The mixed results of $1.45 EPS and revenue of $13.1 billion, announced on Tuesday, did not appear to have much of an impact on the stock market performance thus far. Profits in consumer products, from licensing Disney characters such as Mickey Mouse and Iron Man to toy makers and other manufacturers, grew 27% to $348m.
Operating income at the TV networks division rose 4% to $2.38 billion thanks to a better performance from the Disney Channel, Disney’s ABC Family network and ESPN.
The company reported gross profit of $2.483 billion in its fiscal third quarter.
Viacom Inc. shares plummeted 15% after reporting disappointing third-quarter earnings before markets opened on Wall Street.
Operating profits for the division still rose 9% to $922m (£593m) but revenue missed the expectations of analysts – apparently contributing to the share sell-off.
In a research report Barclays upped their Walt Disney price target on shares to $100.00 from $94.00 giving a rating of “equal weight” on July 20th. Following the release of earnings report, shares were initially down 2.1% at $119.17 in the after-hours trading session. The cable-TV company still increased its outlook for annual earnings-per-share growth, excluding foreign exchanges. Revenue expanded 6% to $954m.
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One of the reasons for investor unease may have been, as BloombergBusiness noted, that Disney, through Tuesday, “had been the top-performing stock in the Dow Jones Industrial Average this year with a record of stellar sales and profit…”
