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The Happiest Place on Earth continues to bring in profits for Disney, which is making money on theme parks but losing money on movies.
Disney just reported earnings for its fourth quarter and financials for its fiscal year. Fourth-quarter earnings were basically in line with expectations, even though the entertainment giant — which just spent $4.05 billion to buy Lucasfilm and the "Star Wars" franchise — didn't quite bring in as much revenue as analysts wanted, for the second consecutive quarter. Still, profits were up and a $10-billion-plus quarter isn't too shabby.
Overall, the company reported a three percent increase in revenue year-over-year.
However — and it's a big however — Disney continues to struggle with both its movie and interactive businesses. Year-over-year, broadcast, theme parks, and consumer products revenues were all up — with parks up by 10 percent. Studio entertainment and interactive revenues were both down year-over year — with interactive posting a 14 percent loss for both the quarter and the fiscal year.
CEO Bob Iger has made moves to fix the movie business. Rich Ross exited earlier this year, replaced by Alan Horn. Iger executed another major acquisition in Lucasfilm, the third after the $7.4 billion Pixar purchase in 2006 and the Marvel buy for $4 billion in 2009. Interactive is trickier. Unlike other Disney divisions, it's overseen by two executives. And the clock is ticking on how long they can continue to lose money. Here's what I wrote when Disney reported third-quarter earnings:
Disney's diversity of businesses is a strength. The question is, "Will it make the interactive unit profitable by 2013, as it has promised?" The interactive business is run by two people, John Pleasants and James Pitaro. Pleasants runs gaming while Pitaro handles the Web products. They appear to be slowly turning the interactive unit around. But if they succeed, they're going to need to find a formula for growth.
Pleasants and Pitaro probably have about a year to go from a 14 percent loss to something that Disney can label as a gain.
For what it's worth, Disney just started its earnings call, and immediately gave shout-outs to "Wreck in Ralph," which had a great opening weekend, and evoked the happy memory of "The Avengers," which has grossed over $620 million since May.