Disney Interactive Media Narrows Loss On Higher Revenue

The Walt Disney Co. (NYSE: DIS) beat the street on revenue and earnings for the quarter ending Oct. 1, led by its cable networks and theme parks, but interactive continues to operate at a loss despite showing some signs of improvement.
Disney earned 58 cents a share for its fiscal fourth quarter, up 35 percent, on $10.4 billion of revenue, up 9 percent. Operating income rose 23 percent to 42.1 billion.
Walt Disney Interactive Media was the only segment operating at a loss, as the the unit’s income was down 32 percent for the year, though it gained 10 percent during the quarter. On the plus side, Interactive Media revenues gained 29 percent for fiscal 2011 and rose 19 percent during the quarter.
The company blamed part of the problems at the Interactive unit on the inclusion of social game developer Playdom, which was acquired for $763.2 million in July 2010, though the deal didn’t close until last fall. For the past year, the Playdom integration has impacted Disney’s earnings negatively, though the effects from that purchase were partially offset by an improvement at entertainment company’s console game business.
While entertainment rivals like Viacom (NYSE: VIA) benefited from its few box office and home entertainment successes, Disney’s Filmed Entertainment revenues for the year fell 5 percent to $6.4 billion as its income dropped 11 percent to $618 million.
Among the other parts under Disney’s Media unit, cable TV was strong from the beginning to the end, as revenues rose double digits during the quarter and for fiscal 2011 in total. Even broadcasting, which is typically a weaker area at most major media companies, was particularly robust on the income side, mostly thanks to cost-cutting as revenues were in the low single digits throughout 2011.