‘Frozen’ powers Disney first-quarter earnings

Walt Disney Co.’s consumer products division -- and its trove of best-selling “Frozen” merchandise -- drove the company to a 19% increase in net income for its fiscal first quarter.

The Burbank company posted net income of $2.182 billion for the quarter that ended Dec. 27, up from $1.84 billion a year earlier. Revenue rose 9% to $13.391 billion.

Disney, the world’s largest entertainment and media company, delivered earnings of $1.27 a share, easily beating analyst expectations of $1.08, according to investment research firm Zacks.

Disney shares rose $2.17, or 2.36%, to $94.10 on Tuesday.

Robert Iger, chairman and chief executive of Disney, said, “Our results once again reflect the strength of our brands and high-quality content and demonstrate that our proven franchise strategy creates long-term value across all of our businesses.”

The company’s consumer products unit was a standout, posting operating income of $626 million, compared with $430 million a year earlier. That 46% increase in operating income was the biggest improvement for any of the company’s five divisions, all of which were profitable.

The unit’s revenue was up 22% to $1.379 billion. Disney attributed the gains to sales of merchandise related to “Frozen,” the hit animated film the company released in November 2013. “Frozen” toys, including a popular collection of dolls, were brisk sellers during the last holiday season.

Disney’s film studio also saw a big jump in profits. The studio posted operating income of $544 million, up 33% from $409 million a year earlier. Revenue, however, was down 2% to $1.858 billion.

A year ago, the studio benefited from the theatrical release of “Frozen,” which went on to gross more than $1.2 billion worldwide. The most recent quarter saw the studio release the animated picture “Big Hero 6,” which has grossed $485 million worldwide, and “Into the Woods,” which has taken in $165 million worldwide, according to Box Office Mojo.

The company’s media networks division posted operating income of $1.495 billion -- up 3% from a year earlier. Revenue rose 11% to $5.86 billion.

Within the division, the cable group’s operating income was down 2% to $1.255 billion. Disney partly attributed the decline to higher programming and production costs at ESPN.

The broadcasting group’s operating income was up 35% to $240 million. Disney attributed the gains to increased affiliate fees and higher program sales.

Disney’s parks and resorts unit posted operating income of $805 million, a gain of 20% from a year earlier. Disney said the strong performance was partly because of increased guest spending at its properties.

Disney’s interactive division reported operating income of $75 million, up 36% from a year earlier. Revenue was down 5% to $384 million. Disney attributed the division’s higher operating income to the success of games “Tsum Tsum” and “Frozen Free Fall.”

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