The Avengers boosts Disney studio's bottom line

Disney has had profits boosted by the hit film The Avengers.

Net income jumped 24 per cent to US$1.83 billion ($2.24 billion) from US$1.48 billion a year earlier.

Sales grew 3.9 per cent to US$11.1 billion, California-based Disney said yesterday, missing projections of US$11.3 billion.

"The bottom line was well ahead of what we were expecting," said Tuna Amobi, a Standard & Poor's analyst who recommends buying the stock. The Avengers, with DVD and consumer products still to come, "sets them up for a strong finish for the year", he said.

The Avengers, released in May, is the top-grossing film of 2012 worldwide and No3 all time, according to researcher Box Office Mojo.

The movie sparked a turnaround for Disney's studio, which had a loss in the previous quarter because of the box-office disappointment John Carter. It also underscored the value of Disney's 2009 purchase of Marvel Entertainment for US$4.2 billion.

"It sort of avenged for the loss of John Carter," chairman and chief executive officer Robert Iger said yesterday.

"It was nice to follow what had obviously been a big disappointment with a huge success."

The studio posted a profit of US$313 million in the quarter ended June 30, up from US$49 million a year ago and reversing the loss of US$84 million in the previous three months. Revenue was little changed at US$1.63 billion.

The Avengers is approaching US$1.5 billion in worldwide ticket revenue, according to Box Office Mojo.

During the quarter, Disney named former Warner Bros president Alan Horn as chairman of the film division, replacing Rich Ross, who left in April.

Profit at Disney's TV networks rose 1.5 per cent to US$2.13 billion, while revenue gained 2.7 per cent to US$5.08 billion. The ESPN cable network realised US$139 million less in deferred fee income in the quarter, compared with a year earlier.

Income at theme parks and resorts gained 21 per cent to US$630 million, while revenue advanced 8.5 per cent to US$3.44 billion.

The two divisions accounted for 87 per cent of Disney's operating income last year.

A remodelled Disney's California Adventure park in Anaheim boosted that park's share of overall Disneyland Resort attendance to 50 per cent from 25 per cent before the additions, Iger said.

Attendance at Disney's domestic parks rose 1 per cent, while spending per head was up 8 per cent thanks to higher ticket prices and spending, according to chief financial officer Jay Rasulo.

The consumer products division, another beneficiary of the Marvel acquisition, registered a 35 per cent increase in profit to US$209 million while sales gained 8.3 per cent to US$742 million.

Revenue from TV businesses such as ESPN and ABC rose 3 per cent to US$5.08 billion, largely in line with forecasts.

Ad revenue at ESPN rose in the "mid-teen" percentages thanks to higher prices, sales volume and bigger audiences.

Disney's interactive unit narrowed its loss of US$42 million from US$86 million, while revenue fell.

- Bloomberg, AP

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