The Cable Networks segment led the growth in fiscal Q3 (April-June) for The Walt Disney Company, but while revenues were not up as much for the Broadcasting segment, within that the ABC O&O stations group was up dramatically. And those same growth drivers are continuing in the current quarter.
Cable Networks revenues jumped 28% to $3.28 billion, with segment operating income up 50% to $1.68 billion. For ESPN, ad revenues were up 31% and even excluding the impact of the FIFA World Cup and NBA Finals, ad revenues for the cable sports network were still up 17%.
“ESPN had a fantastic quarter creatively and commercially,” declared Disney CEO Bob Iger in his quarterly conference call with Wall Street analysts. “What ESPN did with and for the World Cup was nothing short of spectacular. The month-long event was a ratings, revenue and brand building success; while ESPN’s high quality, multi-platform coverage significantly raised the World Cup’s US profile.”
Broadcasting revenues were up 4% in the quarter to $1.45 billion, with operating income up 2% to $209 million. Higher revenues for the ABC O&O stations and from sales of ABC programming to other foreign and domestic outlets were partly offset by higher programming costs for the ABC Network. But that growth for the O&Os was dramatic. Ad revenues rose 32% for the quarter, led by increases in the automotive, political and electronics categories.
For the ABC Network, scatter pricing was 33% higher than Upfront levels. That premium is continuing in the current quarter, with scatter up more than 20%.
The fiscal Q3 growth drivers are continuing to lead the company is fiscal Q3. “Ad sales at both ESPN and our TV stations are pacing up by double digits vs. prior year,” CFO Jay Rasulo told analysts.
For Media Networks (cable and broadcast combined), quarterly revenues rose 19% to $4.73 billion and operating income gained 43% to $1.89 billion. That was the strongest segment of Disney for operating income growth, although some others had higher revenue growth on a percentage basis.
Interactive Media revenues shot up 74% to $197 million, while the division’s operating loss improved to $65 million from $75 million a year earlier. The movie business, Studio Entertainment, saw revenues rise 30% to $1.64 billion and a prior year operating loss of $12 million turned to operating income of $123 million. Consumer Products boosted revenues 19% to $606 million and the division’s operating income grew 22% to $117 million. Even the recession-hit Parks and Resorts division saw revenues rise 3% to $2.83 billion, but operating income declined 8% to $$477 million.
All in all, The Walt Disney Company posted a revenue gain of 16% for the quarter to just over $10 billion. Segment operating income rose 37% to $2.54 billion and net income gained 40% to $1.33 billion.