The Avengers spur Disney to record profit（441words）

By Matthew Garrahan in New York

The blockbuster box office performance of The Avengers: Age of Ultron powered Walt Disney to record third-quarter profits, with the media group also reporting improved performances at its theme parks and consumer products divisions.

Profits beat analyst estimates — the 11th consecutive quarter that Disney earnings have come in ahead of forecasts — but revenues were lower than forecast. This was partly a consequence of weakness in the euro, which hit Disneyland Paris revenues by $100m.

Bob Iger, chief executive, began an earnings call mounting a robust defence of ESPN, Disney’s sports cable network, which has lost some subscribers as viewers reassess their cable television bills and move to cheaper packages.

Mr Iger said there were no plans to move ESPN to an “over the top” service — and go direct to consumers — as other sought after channels such as HBO, have done. ESPN had embraced technology “better than anyone else in traditional media”, he said, adding that watching television via cable and satellite was still “the dominant form of viewing”.

Operating income at Disney’s cable networks division rose 7 per cent to $2.1bn, thanks to a better performance from the Disney Channel, Disney’s ABC Family network — and ESPN.

Frozen, Disney’s 2013 Oscar-winning hit continues to generate strong returns. Merchandise associated with the movie and Disney’s upcoming Star Wars: The Force Awakens lifted consumer products profits 27 per cent to $348m.

Disney’s movie studio, meanwhile, generated operating income of $472m — a 15 per cent increase on the comparable period last time, due to the performance of The Avengers sequel and Cinderella.

Results at the studio were held back by Tomorrowland, the George Clooney science fiction movie, which performed worse than expected at the box office. However, Inside Out, from Disney’s Pixar division, propped up the studio’s returns.

Star Wars fans are counting the days until the December release of the new film. Analysts expect the movie to be among the biggest grossing releases ever.

“We’re making no estimates whatsoever in what we think the film will do,” said Mr Iger. However, he added that the company owned “the most valuable film franchise that ever existed. We fully expect the success of this film to reverberate throughout the company this year and beyond.”

Earnings per share of $1.45 beat analyst estimates. Revenues across the company rose from $12.5bn to $13.1bn while net income increased from $2.2bn to $2.5bn.

Disney shares fell more than 6 per cent in after-market trading.