Disney beats Street on higher theme park spending, toy sales

Thu Nov 7, 2013 7:05pm EST
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By Lisa Richwine

LOS ANGELES (Reuters) - Walt Disney Co (DIS.N: Quote) reported a 12 gain in profit that beat Wall Street expectations, lifted by higher visitor spending at U.S. theme parks, increased consumer product sales and its summer animated movie hit "Monsters University."

The media company on Thursday posted diluted earnings per share of 77 cents for the quarter ended in September, edging the 76 cents average estimate of analysts surveyed by Thomson Reuters I/B/E/S. Net income for the quarter rose to $1.4 billion, a 12 percent gain a year earlier.

Shares of Disney, which have gained nearly 35 percent this year, slipped 1.8 percent in after-hours trading to $65.94, down from their earlier $67.15 close on the New York Stock Exchange.

Investors reacted negatively to a prediction from Disney Chief Financial Officer Jay Rasulo, on a post-earnings conference call, that capital expenditures will increase by $1 billion over 2013, said Needham & Co. analyst Laura Martin. Most of those funds will go toward increased investment in the Shanghai Disney Resort scheduled to open in late 2015, Rasulo said.

"The company had been saying that the capital expenditures were going down," said Martin, who rates Disney stock a "hold." "Markets look ahead," he added.

For the just-ended quarter, operating income at Disney's cable network unit, which includes its powerhouse ESPN sports channel, decreased by 7 percent to $1.3 billion in the quarter, the company said, citing the timing of some ESPN affiliate fee revenue.

Despite taking an undisclosed writedown for its summer flop "The Lone Ranger," Disney's movie studio reported a 35 percent rise in earnings during the quarter, boosted by Pixar prequel "Monsters University." The film generated $743 million in worldwide ticket sales, according to the site Box Office Mojo.

Disney also announced it will release the next installment in the blockbuster "Star Wars" film franchise on December 18, 2015.   Continued...

A rainbow is seen behind a fountain featuring Mickey Mouse at the entrance of Hong Kong Disneyland July 13, 2012. REUTERS/Bobby Yip