Aug. 7 - The Walt Disney blockbuster flick ''The Avengers'' powered better-than-expected earnings in the third quarter, offsetting weaker revenues from broadcast and cable, possibly setting up a showdown for the media conglomerate's stock price. Bobbi Rebell reports.
The Avengers helped deliver heroic earnings from Disney. The blockbuster took in $1.4 billion dollars worldwide- and Disney is now developing a Marvel- based TV show developed by the Avengers director for its ABC network. Third quarter earnings were up 31 percent- beating forecasts. Alan Gould of Evercore Partners: SOUNDBITE: ALAN GOULD, SENIOR ENTERTAINMENT ANALYST, EVERCORE PARTNERS (ENGLISH) SAYING: "I think it is a validation of the Marvel acquisition not only that the studio results but also the consumer product results because both Marvel and Pixar were as much consumer product acquisitions as they were studio acquisitions. " Theme park earnings were up 21 percent. But earnings at their ESPN cable network were down. Still, the company says it is bullish on the advertising prospects for the next few months. Gould explains why there is so much focus on the sports network. SOUNDBITE: ALAN GOULD, SENIOR ENTERTAINMENT ANALYST, EVERCORE PARTNERS (ENGLISH) SAYING: "ESPN gets the largest affiliate fee from all the cable networks. It gets about $5 per subscriber from every cable, satellite, and telephone video customer in the country; that works out to $6 billion a year. And then Disney is re-investing that money by buying the best sports programming rights." Meanwhile advertising revenues at the ABC network were off- due to lower ratings. Disney shares have been getting great reviews from investors- trading near all-time highs ahead of the earnings release. Morningstar's Michael Corty: SOUNDBITE: MICHAEL CORTY, ANALYST, MORNINGSTAR (ENGLISH) SAYING: "The stock is close to $50 I think it's worth $50 so there could be a little more upside from here but it's been, in terms of entry points, I'd encourage investors to wait; a lot of the good news is already priced into Disney shares at this point." Consumers are still snapping up Disney merchandise- revenues were up driven by new stores in North America and Europe, a sign shoppers are still enamored with the Magic Kingdom. Bobbi Rebell, Reuters.