Wednesday, May 9, 2012

Walt Disney Increases Profits for 2012 Q1

Disney increases Profits by 21%

Earlier this year, Walt Disney released its sci-fi adventure film “John Carter” which turned out to be a major flop. The film has cost the company more than $280 million in losses (including write-downs associated with John Carter). The big budget movie had a production and marketing expenditure of $400 million and so far, it has managed to collect only $271 million. The chairman of Walt Disney studios Mr. Rich Ross lost his job over the disaster. The company has now released its financial statement for the first quarter of 2012 and has, surprisingly, reported an increase in profits by 21 percent.

The quarterly net income of Disney now stands at $1.14 billion, up from $942 million reported last year. After “John Carter”, Disney has also released “The Avengers” which has shown promise by earning the number one spot in global box office performance. The film studios have however, reported an operating loss of $84 million for the first quarter. The financial result of Avengers is not reported in the current report and will be disclosed in detail in the third quarter.

Where have the profits come from?

The profits have come in from television and theme park income. ESPN and Disney Channel have proven to be the company’s main strengths by reporting income of $1.7 billion.

Disneyland has contributed $222 million in the first quarter, an increase of 53 percent over the last year. The Tokyo Disney Resort has also shown improved results but the improvement was mainly because last year, the park closed down for three weeks due to March, 2011 earthquake and tsunami. 

The financial condition of the company is expected to improve even further in the third quarter owing to

a.      an expected continuous stream of income from television and theme parks
b.      The Avengers” which has earned $702 million in the first two weeks. Pixar’s “Brave” and Tim Burton’s stop-motion animation movie “Frankenweenie” are also expected to be released this fall. 

Your comments and feedback are always appreciated.
Sarfaraz A.K.