Disney is introducing "active" mannequins in 32 of its redesigned stores.
The Walt Disney Company posted better than expected earnings in its fiscal third quarter. The positive report was the result of a bookkeeping maneuver.
In May, Disney said it would post earnings from ESPN in its fiscal fourth quarter, but decided to post early. That $228 million in fees gave Disney stock a nickel increase in its share price; without it, analysts say earnings would’ve fallen short by a penny. It also points to a loss next quarter.
Net income rose 11 percent overall and revenue grew to $10.7 billion – higher than expectations. Disney parks and resorts revenue jumped 12 percent, though the earthquake and tsunami in Japan hurt its Tokyo theme parks.
Studio earnings dipped a bit, in part because of the high cost of producing the latest Pirates of the Caribbean movie. The combined blockbuster power of "Cars 2," "Thor," and "Pirates of the Caribbean: On Stranger Tides" could not top last year's "Toy Story 3," "Iron Man 2," "Alice in Wonderland," and "Prince of Persia."
Net income in the three months through July 2 grew to $1.48 billion, or 77 cents per share, up from $1.33 billion, or 67 cents per share, a year ago.
Disney's earnings came after a wild ride on the stock market following Standard & Poor's first-ever downgrade of U.S. debt on Friday. Reacting to the bad news, the Dow Jones industrial average plunged 635 points on Monday, its worst point decline since 2008, only to rebound 429 points on Tuesday, the tenth-highest point gain in history.
Commenting on the turmoil and the possible damage it could have on the consumer psyche, CEO Bob Iger said visitors to its theme parks didn't appear to be changing their upbeat spending habits.
"During the past few days we have not seen any change in the pace of activity at our parks and resorts, advertising or consumer products businesses," Iger said to analysts on a conference call. "With Disney, ESPN, Pixar, Marvel and ABC, we remain well-positioned for whatever economic conditions we face in the future."
Advertising revenue was flat at ESPN as higher ad rates made up for the lack of the FIFA World Cup and Game 7 of the NBA finals this year. Excluding the marquee sporting events from a year ago, ad revenue at ESPN rose 9 percent. That was below the adjusted 23 percent gain in ad revenue at ESPN in the previous quarter, showing the ad market recovery that has boosted media companies was losing steam.
Revenue at cable TV channels including ESPN rose 7 percent to $3.52 billion.
Broadcasting revenue fell 1 percent to $1.43 billion as ad revenue on its ABC network grew, but local ad sales at TV stations fell because of lower political spending.
Combined, Disney's TV businesses saw operating profits grow 11 percent to $2.09 billion, again proving to be the biggest and most reliable source of earnings for the company.
Consumer products revenue grew 13 percent to $685 million. Interactive media revenue grew 27 percent to $251 million but losses increased 32 percent to $86 million, even after its purchase of social game maker, Playdom, last year.
This story incorporates information from the Associated Press.