Walt Disney’s results beat estimates

Walt Disney Company’s quarterly results surpassed cautious Wall Street expectations, but the media and entertainment giant now has to grapple with an uncertain outlook for consumer spending. Investors had expected a strong performance after rivals like Time Warner Inc outperformed, and Disney delivered with growth at its ESPN sports network and other cable channels. But worries about the economy and a global markets selloff are spurring fears that consumers will curb trips to movie theaters and theme parks, or that advertisers will pull back after a recent spending binge as corporate budgets tighten. “If there was any economic weakness, the parks business would be the most vulnerable to that. As of now, they haven’t seen any weakness,” said Morningstar analyst Michael Corty. Disney shares were down 1.7 per cent at $34.10 in after-hours trade, giving up part of a 5 per cent gain during the regular session where it closed at $34.70. Its movie studio - headed since late 2009 by fresh-faced wunderkind Rich Ross, credited for the monster franchises Hannah Montana and High School Musical - also disappointed despite a blockbuster smash with the fourth “Pirates of the Caribbean” film and the superhero flick “Thor.”Studio entertainment operating income plummeted 60 per cent to $49 million. The Parks and Resorts group, which includes Disneyland parks and is closely tied to consumer spending, jumped 12 per cent to $3.2 billion in the period. But the results were aided by the new “Disney Dream” cruise ship. “The parks will continue to improve financially,” said Gabelli & Co analyst Brett Harriss. “It remains to be seen if recent volatility will impact consumer behavior.” Rival media companies had already reported strong results for the quarter. Comcast Corp, Time Warner Inc and CBS Corp beat Wall Street forecasts. The Media Networks arm, which incorporates sports channel ESPN and the ABC TV network, posted a better-than-expected 5 per cent gain in fiscal third-quarter revenue to $4.95 billion. ESPN “came in better than people had feared. They ended up with just a good, solid quarter,” said Lazard Capital Markets analyst Barton Crockett, who said that its theme parks business was holding up well. “People are coming back to Disney vacations and that’s good for these guys.” The operator of the ESPN and ABC networks, a movie studio and theme parks, reported fiscal third-quarter revenue of $10.68 billion, better than $10.5 billion expected. But Disney’s movie studio and ABC network remain challenged despite a management overhaul instituted by CEO Bob Iger at those divisions over the last two years. Fed up with underperformance, Iger in October 2009 replaced longtime studio boss Dick Cook and last year got rid of ABC Entertainment head Stephen McPherson and ABC News chief David Westin. All three were replaced by executives from the cable ranks, a testament to that unit’s ascendancy. Studio honcho Ross has been unable to replicate his small-screen success on the big screen. Hits such as “Toy Story 3” and “Pirates of the Caribbean” emerged from Cook’s regime.At ABC, which by itself posted a 1 per cent dip in revenue to $1.4 billion but grew operating income 20 per cent to $250 million, Iger last year named Paul Lee, formerly of ABC Family, to replace McPherson. Broadcast news veteran and Charlie St. Cloud author Ben Sherwood took Westin’s place. Lee’s first official development slate, which will hit ABC’s schedule when the new fall season begins next month, didn’t go over well with critics, who complained the new crop of shows -among them a Charlie’s Angels reboot and the Mad Men-mimicking Pan Am -were too broad and uninspired.On the news side, ABC has taken a beating in the press for paying license fees for access to photos and interviews with headline-makers like Representative Anthony Weiner’s texting partner Meagan Broussard, and most notably, Casey Anthony. The pay-for-play accusations resurfaced last month after ABC landed an exclusive with Nafissatou Diallo, the maid who accused IMF ex-chief Dominique Strauss-Kahn of rape.  From / Gulf Today