Revenues were up 6% to $9.08 billion for The Walt Disney Company in fiscal Q2 (January-March). Media networks led the way, with the cable networks growing the most, but broadcast TV also strong.
As the largest segment of Disney, Media Networks saw revenues rise 12% to $4.32 billion – nd that translated into an even bigger gain of 17% in operating income to $1.52 billion.
Cable networks revenues gained 17% to $2.83 billion and operating income rose 15% to $1.36 billion. The company cited growth by ESPN, ABC Family and the Disney Channels. Advertising rates were also higher.
CFO Jay Rasulo told analysts in the quarterly conference call that ESPN revenues were up 43% — and that even excluding new BCS games the gain was 23%.
Broadcasting revenues were up 4% to $1.5 billion, but that boosted operating income by 36% to $167 million. Revenues were up for the ABC Network and the O&O TV stations, plus the company booked higher affiliate fees and increased sales of ABC Studios productions.
Rasulo said ad revenues at the O&O TV stations were up 6% in the quarter. Scatter pricing for the ABC Network was up 41% over the Upfront.
The big drag for the quarter was the film business, which lacked the “Toy Story” revenues from a year earlier. Segment revenues fell 13% to $1.34 billion and operating income dropped 65% to $77 million. Parks & Resorts revenues rose 7% to $2.63 billion and operating income declined 3% to $145 million. Consumer Products revenues were up 5% to $626 million and operating income gained 7% to $142 million. Interactive Media revenues grew 3% to $159 million and the unit posted an operating loss of $115 million, up from a loss of $55 million a year earlier.
CEO Bob Iger, pictured, is predicting a strong Upfront and said he is excited about the pilots he’s been watching.
Asked about local TV, Iger said ad sales for fiscal Q2 were up 9% excluding political. “In the third quarter [April-June] and then again in the fourth quarter [July-September] we’re going to be lapping what was an unbelievably strong second half of the year last year with political spending, so your comps are going to get even more difficult. In general, pacings at our stations have been relatively strong. We continue to have industry leading stations in the markets where we operate, most of the markets that we operate in. The third quarter might be slightly softer than the second quarter – partly that has to do with what’s going on with Japanese automotives,” Iger said.
As for the current quarter, Rasulo said the TV stations and ABC Network are pacing up in the single digits. Scatter pricing is up more than 30% over the past Upfront.