Disney profit soars 27% on strength of ‘Frozen’

Walt Disney Co. reported a 27% surge in second-quarter profit, lifted by the continued strong performance of its blockbuster animated film “Frozen.”

The world’s largest entertainment and media company raked in nearly $2 billion in the three months that ended March 29, and easily topped Wall Street projections.

“Frozen” has become the highest-grossing animated movie of all time since its release Nov. 22, grossing $1.175 billion worldwide. Disney said the film’s overseas theatrical performance and strong sales on home entertainment platforms including Blu-ray and DVD contributed to its studio division’s strong quarter.

Disney said profit at the studio quadrupled during the quarter compared with last year. The company’s four other units — media networks, parks and resorts, consumer products and interactive — also experienced double-digit profit growth for the second quarter in a row.

“The strength across the business is really solid,” analyst Robin Diedrich of Edward Jones Research said. “The standout at the studio, ‘Frozen,’ is definitely exciting, but from a long-term perspective we think it is good to see that all segments of the business are growing.”

The Burbank company reported Tuesday that net income rose to $1.917 billion, up from $1.513 billion a year earlier. Revenue jumped 10% to $11.649 billion.

Earnings per share rose to $1.08, up from 83 cents a year earlier. Excluding charges for foreign exchange losses and restructuring, Disney’s adjusted earnings per share were $1.11. Analysts had predicted 97 cents a share, according to investment research firm Zacks.

“Frozen” helped anchor the studio division’s operating profit of $475 million and revenue of $1.8 billion. Disney Chairman and Chief Executive Robert Iger said on a conference call with analysts that “Frozen” is now considered one of the company’s top five franchises.

“You can expect us to take full advantage of that over the next at least five years,” Iger said.

In addition to a “Frozen” Broadway show in the works, Iger said that Disney is “developing some concepts around” increasing the movie’s presence at its theme parks.

Iger used the conference call to highlight other film successes.

The studio’s most recent hit, “Captain America: The Winter Soldier,” was released last month after the second quarter ended. The Marvel Studios film, which stars Chris Evans in the title role, has grossed $682 million worldwide, far more than the $371 million taken in by the original 2011 picture.

“It’s clear momentum is building for that franchise,” said Iger, adding that the success of the “Captain America” sequel illustrates the value of Marvel. Disney acquired the company for $4 billion in 2009.

“With ‘Avengers 2’ in production and coming up and characters from ‘Avengers’ still very much in favor with audiences, I think there’s huge potential there,” he said of Marvel.

Iger also said that he’d recently visited the set of the studio’s new “Star Wars” film and departed “more confident than ever that [it] will be the extraordinary movie ‘Star Wars’ fans are waiting for.”

In addition to that project and two other planned “Star Wars” pictures, Disney is developing “at least three” spin-off films for the franchise, he said. The company has previously said there would be two “Star Wars” spin-off movies.

Disney acquired Lucasfilm, creator of “Star Wars,” for $4.06 billion in 2012.

“They paid a lot of money for this but it is a huge potential brand,” Diedrich said. “It is not just going to be a couple of movies — it is going to be a lot more than that.”

The company’s media networks group, which includes ABC and ESPN, posted operating income of $2.133 billion, up 15%. Overall, revenue rose 4% to $5.134 billion for the media networks. The company attributed the improvement partly to growth at ESPN, which experienced increased affiliate revenues and decreased production and programming costs.

Disney’s interactive division reported operating income of $14 million, compared with a loss of $54 million a year earlier. Revenue was up 38% to $268 million. Disney attributed the division’s success to its hit action-adventure video game “Disney Infinity,” which has sold more than 3 million copies since launching last summer.

The game, available on PlayStation 3, Xbox 360 and other platforms, was released after a lengthy development process that cost Disney about $100 million. It incorporates physical toys based on Disney characters into the on-screen action.

“Disney Infinity” has been a bright spot for the interactive division, which in March said it was cutting about 700 jobs worldwide. The division lost more than $200 million a year from 2008 to 2012, and parted ways with co-President John Pleasants in November.

“They have one really great platform now (“Disney Infinity”), but in the past they have tried a lot of different things and it has been hits and misses,” Diedrich said.

Disney’s parks and resorts division posted operating income of $457 million, a gain of 19% from a year earlier. The company said the strong performance was partly because of an increase in guest spending at Walt Disney World Resort and higher attendance at Disneyland Resort.

The company also discussed how its new MyMagic+ system has affected guest behavior at the Walt Disney World Resort, where the service has been offered since last year. The system allows theme park visitors to more efficiently tour the attractions, with a MyMagic+ bracelet used as a hotel room key, theme park ticket, and to make purchases.

Walt Disney Co. Chief Financial Officer Jay Rasulo said on the conference call that MyMagic+ is being used by three-fourths of the resort’s hotel guests to plan their visits.

“Historically guests who preplan spend more time at our parks, so we like these early trends,” he said.

Disney shares, which fell 19 cents to $81.03 in regular trading Tuesday, were up 45 cents in after-hours trading.

daniel.miller@latimes.com