Walt Disney Co. Posts Better Than Expected Earnings As Upcoming Films Bring Hope For More Profits

Walt Disney Co. has beaten analysts’ expectations as the company reported a second-quarter profit boosted by sales of “Frozen” merchandise and theme park growth. The shares of the world’s biggest entertainment company had quickly soared beyond its 52-week high but the stock didn’t gain momentum as it fell flat in next day’s trading.

The company, led by chairman and CEO Bob Iger, reported earnings of US$1.23 (AU$1.53) per share or $2.11 billion compared to $1.08 per share or $1.92 billion in the same period of 2014. Wall Street analysts had predicted earnings per share of $1.10. Walt Disney’s revenue in the second quarter had increased 7 percent or $12.46 billion, reports Bloomberg.

Disney’s studio unit was widely expected to post weaker financials compared to last year’s numbers buoyed by the success of “Frozen”. The company said the low distribution figures in home entertainment and international theatres reflected the performance of “Big Hero 6” in the current quarter compared to Frozen in the same quarter of 2014. Studio entertainment revenue for the recent quarter dropped 6 percent to $1.7 billion.

Iger said in an earnings conference call with analysts that Walt Disney has a “very deliberate” plan for the release of the movie “Star Wars: Episode VII - The Force Awakens” on December 18. He explained he wants to avoid doing too much as the company introduces the franchise to new audiences in China and other countries.

The Walt Disney CEO said the company is “overwhelmed” with interest for Star Wars. Most consumer merchandise will be released a few months before the movie opens. Iger remarked the franchise will have “a huge opportunity” in theme parks.

Price increases in the entrance fees in Disney theme parks in Florida and California had boosted profit of the company’s theme park segment by 24 percent. Walt Disney has reaped the benefits of investments made during leaner years to draw customers who can spend more in an improved economy. Merchandise from the movie “Frozen” drove sales of consumer products and yielded a 32 percent increase in profits.

The studio’s biggest new release in the recent quarter was “Cinderella” with $495 million revenue at the international box office. While the movie was not as successful as Disney’s box office hit, Frozen, profit at the studio dropped less than what analysts had expected to 10 percent from a year earlier.

Under the leadership of Iger, the company has since acquired Pixar, Lucasfilm, Marvel and newly revived Disney Animation. Fortune reports that Walt Disney will be releasing more films within the year including Pixar’s “Inside Out”, Marvel’s “Ant Man” and Lucasfilm’s “Star Wars: The Force Awakens.” These films are expected to bring in more profit for the popular entertainment company.

(To report problems or leave feedback on this article, contact: r.su@ibtimes.com.au)