Disney profit beats forecast despite studio decline

Walt Disney Co posted a slightly higher quarterly profit that beat Wall Street expectations, even though its movie studio earnings declined as hit film Iron Man 3 (cinema still in photo) failed to match the spectacular success of last year's The Aven
Walt Disney Co posted a slightly higher quarterly profit that beat Wall Street expectations, even though its movie studio earnings declined as hit film Iron Man 3 (cinema still in photo) failed to match the spectacular success of last year's The Avengers. -- FILE PHOTO:  WALT DISNEY CO

LOS ANGELES (REUTERS) - Walt Disney Co posted a slightly higher quarterly profit that beat Wall Street expectations, even though its movie studio earnings declined as hit film Iron Man 3 failed to match the spectacular success of last year's The Avengers.

Pre-release marketing costs for box office bomb The Lone Ranger helped drag down operating income at the studio division by 36 per cent from a year earlier, Disney said on Tuesday.

Disney expects a loss of US$160 million to $190 million (S$203 million to S$241 million) in the quarter that ends in September for the Johnny Depp movie, chief financial officer Jay Rasulo said.

Disney shares fell 1.5 per cent to US$66.06 in after-hours trading, from their US$67.05 close on the New York Stock Exchange.

Overall, net income rose 1 per cent to US$1.85 billion in the quarter that ended in June. Adjusted earnings-per-share reached US$1.03, beating the US$1.01 average forecast from analysts polled by Thomson Reuters I/B/E/S.

Operating income increased at the company's theme parks and its media networks division, which operates sports channel ESPN.

"Overall it was a decent quarter, but nothing to get excited about," Wunderlich Securities analyst Matt Harrigan said.

A gain in fees and advertising revenue at ESPN helped lift operating income at Disney's media networks by 8 per cent to US$2.3 billion for the quarter.

At the parks unit, operating income increased 9 per cent to US$689 million as more people visited Disney's theme parks in Florida and California.

The interactive gaming unit posted a loss of US$58 million.

The company is counting on the Aug 18 release of its Infinity game to turn the unit profitable.

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