UPDATE, 3:10 PM: CEO Bob Iger told analysts that Disney hasn’t seen much change in consumer spending plans as a result of the stock market gyrations and recession talk over the last few days. He adds that he doesn’t think that price discounting at the theme parks is “something we’ll have to do quickly.” In the conference call analysts mostly wanted to know Iger’s thinking about when and how he’ll offer Disney movies and TV shows to online streaming services such as Netflix. He says that “we’re in discussions with Netflix and a number of other entities and it’s likely we’ll make more deals” soon. Online services will land “little, if any” TV shows the same season they initially air. Iger wants to “protect and respect” current cable and satellite pay TV providers. Indeed, even though Iger wants to sell Hulu — which Disney co-owns with News Corp and Comcast’s NBC Universal — it’s unclear whether he’ll help the cause by guaranteeing that a buyer fresh Disney programming on an exclusive basis for several years. Speaking generally about online Iger says that “I don’t think we’ll make long term deals for the content. The world is changing” too quickly. “It’s exciting, but we’re still at the beginning of the beginning.”
PREVIOUS, 1:23 PM: The bad news is that Cars 2 and Thor, both released in the quarter that ended in June, were no match for last year’s Toy Story 3 and Iron Man 2. Operating profits for Disney’s studio entertainment unit, at $49M, were down 60% vs the same period last year while revenues fell 1% to $1.6B. But every other unit was up to provide the parent company with net income of $1.48B, up 11%, on revenues of $10.68B, up 7%. Earnings at 77 cents a share topped the 73 cents that analysts expected, while revenues slightly exceeded the consensus forecast. The cable networks, and especially ESPN, did a lot of the heavy lifting: Revenue from cable was up 7% to $3.52B. The sports network benefited from higher fees from cable operators as well as lower production costs. That helped to compensate for higher costs for original programming at the worldwide Disney Channels and ABC Family. The ABC broadcast network also had less expensive programming, but revenues fell 1% to $1.43B. Total spending at Disney’s theme parks and resorts was up 12% to $3.17B. Strong results from the Disney Cruise Line and Hong Kong Disneyland Resort outweighed decreases at Disneyland Paris and Tokyo Disney Resort. “In these turbulent times, our company and its array of strong brands are well-positioned to deliver long-term shareholder value,” CEO Bob Iger says. Disney shares fell 1.3% in after-hours trading.
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