Cable Nets, Studio Drive Record Year at Disney

Revenue Rises 8%, But Programming Costs Drag ESPN
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The Walt Disney Co., fueled by strong gains at its cable networks and movie studios, reported record growth for fiscal 2014 and the fourth quarter, with overall revenue up 8% to $48.8 billion for the full year while segment operating income for the period rose 21% to $13 billion.

For the quarter, overall revenue rose 7% to $12.4 billion and segment operating income increased 12% to $2.8 billion.

“Our results for Fiscal 2014 were the highest in the company’s history, marking our fourth consecutive year of record performance,” Disney chairman and CEO Bob Iger said in a statement. “We’re obviously very pleased with this achievement and believe it reflects the extraordinary quality of our content and our unique ability to leverage success across the company to create significant value, as well as our focus on embracing and adapting to emerging consumer trends and technology.”

Media Networks, which includes cable channels ESPN, The Disney Channel and ABC Family as well as broadcast network ABC, saw revenue rise 5% in the quarter to $5.2 billion, while segment operating income was flat at $1.4 billion. At the cable networks, segment operating income in the quarter was down 1% despite a 6% revenue increase, largely because of higher programming costs at ESPN. Disney said higher costs for Major League Baseball, college football and World Cup rights offset higher affiliate fees (including those from newly launched SEC Network) and increased advertising revenue.

For the year, cable networks revenue rose 5% to $15.1 billion and segment operating income was up 7% to $6.5 billion.

At Studio Entertainment, revenue in the quarter rose 18% to $1.8 billion, while segment operating income more than doubled to $254 million, fueled by the box office success of movies Guardian of the Galaxy and Maleficent and home entertainment sales associated with animated hit Frozen.

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