Disney Ups Q4 Operating Income 35%7 Nov, 2013 By: Erik Gruenwedel
The Walt Disney Co. Nov. 7 said its studio unit posted fourth-quarter (ended Sept. 28) operating income of $108 million, up 35% from operating income of $80 million during the previous-year period. Revenue increased 7% to $1.5 billion from $1.4 billion last year.
For the 2013 fiscal year, operating income fell 8% to $661 million, from operating income of $722 million last year. Revenue for the year, revenue increased 3% to $6 billion.
Walt Disney Studios cited the decline in fiscal year operating income primarily to a decrease in home entertainment results, partially offset by an increase in SVOD sales of library titles and lower film impairments.
Lower home entertainment results were driven by decreased unit sales reflecting the performance of Brave, Iron Man 3, Wreck-It Ralph and Cinderella Diamond Release on Blu-ray Disc in the current year compared to Marvel's The Avengers, Cars 2 and The Lion King Diamond Release in Blu-ray in the prior year along with lower catalog sales.
Lower film impairments were due to the write-down of The Lone Ranger in the current year compared to the write-down of John Carter and higher development cost write-offs in the prior year. Theatrical distribution results were essentially flat year over year as increased revenues were offset by incremental distribution and production cost amortization.
A key driver of the revenue and cost increase was the release of two Disney animated features, Wreck-It Ralph and Planes in the current year versus none in the prior year. Other significant titles in release during the year included Iron Man 3, Monsters University and Oz The Great and Powerful compared to Marvel's The Avengers, Brave and The Muppets in the prior year.