Overall revenue rose 5% for Walt Disney Co. in the fiscal first quarter, but losses at its film studio in the period more than erased modest gains at its cable and broadcast networks.
Disney reported overall revenue of $11.3 billion in the period ended Dec. 29, up 5% from $10.8 billion in the prior year. Net income for the period fell 6% to $1.38 billion (77 cents per share) and free cash flow declined 46% to $599 million from $1.1 billion a year earlier.
Despite the declines, Disney beat most analysts' expectations for the quarter, reflected in its shares rising 1.7% (93 cents each) to $55.22 each in after-hours trading Tuesday.
Cable network revenue increased 7% to $3.5 billion, but operating income declined 2% to $952 million, as higher programming and production costs at ESPN offset growth in its Disney Channel, ABC Family and A&E Television Network properties.
Broadcasting revenue increased 6% to $1.6 billion in the period, while operating income rose 16% to $262 million on increased ad revenue at its ABC Television Network and owned and operated stations.
For Disney, most of the pain was felt by its studio entertainment division, where revenue declined 5% to $1.5 billion and segment operating income fell 43% to $234 million, mainly due to declines in home entertainment and theatrical releases.
“After delivering another record year of growth in 2012, we're off to a solid start in Fiscal 2013," Disney chairman and CEO Robert Iger said in a statement. "Our ongoing success is driven by our long-term strategy, the strength of our brands and businesses, and our high quality family entertainment."
Disney is scheduled to hold a conference call with analysts to discuss results at 5 p.m.