Disney looks to avenge studio loss after upbeat 2Q

LOS ANGELES (AP) -- The Walt Disney Co. is looking to avenge the loss it took on the blockbuster bomb "John Carter." What better way than to ramp up its investment in the superhero franchise "The Avengers."

Disney said Tuesday that its net income in the first three months of the year grew 21 percent even as it took a $200 million loss on "John Carter." Better performance from pay TV network ESPN and its theme parks offset the studio problems.

The company now looks set to benefit from the Marvel movie franchise, whose latest installment has reaped $702 million from box offices worldwide.

Merchandise related to the Marvel movie was sold out in many locations following its April 25 release overseas, the company said. The movie shattered U.S. opening weekend records after it opened on Friday.

"We are hard at work replenishing stuff on our shelves," Chief Executive Bob Iger said.

Disney bought Marvel for $4.24 billion in December 2009 as it sought to build up its appeal with boys.

The company plans an Avengers sequel sometime after the release of "Iron Man 3" and "Thor 2" next year and "Captain America 2" in 2014. The company has been working for a year to develop "Avengers" attractions at theme parks, although a prior arrangement with Universal prevents such attractions at its parks in Orlando, Fla., Iger said.

"We fully intend to continue to fuel the marketplace with Marvel's `Avengers'-related stories and characters so that the momentum continues," Iger said.

Prior to the film's release, net income for the fiscal second quarter rose to $1.14 billion, or 63 cents per share, from $942 million, or 49 cents per share, a year ago.

Earnings came to 58 cents per share after excluding one-time items, including a $184 million non-cash gain related to Disney acquiring a controlling stake in Indian media company UTV. That topped the 55 cents expected by analysts polled by FactSet.

Revenue rose 6 percent to $9.63 billion from $9.08 billion. That also beat the $9.57 billion expected.

Disney's stock rose 75 cents, or 1.7 percent, to $45.05 in after-hours trading after the release of results. Its shares are up 20 percent since the start of the year.

Disney's movie studio lost $84 million, which was on the low end of the $80 million to $120 million range that the company forecast based on the box office performance of "John Carter." Revenue fell 12 percent to $1.2 billion. Disney is looking for a successor to studios chairman Rich Ross, who quit last month in a move seen as taking responsibility for the troubles.

Gains elsewhere undid the damage.

Revenue from pay TV operations including ESPN and Disney Channel rose 12 percent to $3.2 billion as fees from distributors and advertising sales grew. ESPN ad sales rose 14 percent, or 6 percent when excluding the timing of events such as the Rose Bowl and the impact of the NBA lockout.

Broadcast TV revenue from its ABC operations rose 2 percent to $1.5 billion as network ad revenue rose 6 percent, but ad revenue at the eight TV stations it owns fell 8 percent.

Parks and resorts revenue grew 10 percent to $2.9 billion as attendance and spending grew in the U.S. Gains at overseas parks in Tokyo and Hong Kong were partially offset by a decrease in Paris.

The company is in the midst of a multi-year peak in what it spends developing its parks and resorts business. It launched a new cruise ship, the Disney Fantasy, in March and will open the 12-acre Cars Land expansion at Disney's California Adventure in June.

The gradual roll-back of recession-induced discounts is helping results.

Consumer products revenue rose 8 percent.

Its interactive media division saw revenue rise 13 percent while trimming its losses. The interactive unit is still on pace to be profitable by 2013 as the company prioritizes social and mobile games over expensive-to-produce games for video game consoles like the Xbox 360.

AP.

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Disney looks to avenge studio loss after upbeat 2Q

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