The Walt Disney Company Reports Third Quarter Earnings

on August 10, 2010
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BURBANK, Calif. -- The Walt Disney Company /quotes/comstock/13*!dis/quotes/nls/dis (DIS 35.65, +0.36, +1.02%) today reported earnings for its third fiscal quarter and nine months ended July 3, 2010. Diluted earnings per share (EPS) for the third quarter increased 31% to $0.67 from $0.51 in the prior-year quarter. For the nine month period, EPS increased 24% to $1.60 from $1.29 in the prior-year period. The quarter and nine month results were driven by growth at Media Networks and Studio Entertainment. Media Networks benefitted from earlier recognition of previously deferred revenue at ESPN.

"We're very pleased with our strong third quarter, in which we grew revenues substantially and improved profitability across the majority of our businesses," said President and Chief Executive Officer Robert A. Iger. "Our performance underscores the value of sticking to a smart strategy even in tough times, of investing in the right people, and of focusing relentlessly on quality and innovation to drive growth in shareholder value."

Studio Entertainment

Studio Entertainment revenues for the quarter increased 30% to $1.6 billion and segment operating income increased $135 million to $123 million. Higher operating income was primarily due to the strong worldwide performance of our key titles in theatrical markets and improvements in domestic home entertainment and worldwide television distribution.

Worldwide theatrical results reflected the strong performance of Toy Story 3, Alice in Wonderland, and Iron Man 2 in the current quarter, partially offset by higher film cost write-downs. The prior-year quarter included Up, Hannah Montana: The Movie and The Proposal.

The increase at domestic home entertainment was primarily due to a lower production cost amortization rate and lower distribution and marketing expenses resulting from cost reduction initiatives. Key releases included Alice in Wonderland in the current quarter versus Bedtime Stories, Bolt and Confessions Of a Shopaholic in the prior-year quarter.

The improvement at worldwide television distribution was driven by the timing of titles available in international markets.

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