Disney delivers record revs, profits for fiscal 2014
| 07 November 2014
In contrast to the travails of one of its rivals' recent results, the Walt Disney Co is celebrating a very strong end to a year that has seen record revenues and net income.

DisneyOverall for the year ended 27 September 2014, the company reported that revenues increased 8% to a record $48.8 billion and that net income increased 22% to a record $7.5 billion.

The company's media networks division encompassing cable networks and broadcasting showed revenues for the quarter increasing year on year 5% to $5.2 billion even though segment operating income was essentially flat at $1.4 billion. Operating income at cable networks decreased $10 million to $1.3 billion for the quarter while lower operating income was driven by a decrease at ESPN and the international Disney Channels, partially offset by an increase at the domestic Disney Channels. The decrease at ESPN was attributed mainly to higher programming costs, partially offset by higher affiliate and advertising revenue.

The increase in programming costs was driven by contractual rate increases for Major League Baseball, NFL and college football rights, the airing of World Cup soccer and new college football rights. Higher affiliate revenue reflected increased contractual rates and subscribers, taking into account subscribers for the new SEC Network, while the increase in advertising revenue was due to increased units delivered and higher rates, partially offset by lower ratings.

Operating income at broadcasting increased $5 million to $163 million for the quarter. The increase in operating income was due to affiliate revenue growth and higher income from programme sales, partially offset by higher primetime programming costs and lower advertising revenue. Higher affiliate revenues were driven by contractual rate increases and new contractual provisions. An increase in primetime programming costs was driven by higher programming write-offs and higher cost programming including a contractual rate increase for Modern Family. Lower advertising revenue was due to fewer units sold at the ABC Television Network.

"Our results for fiscal 2014 were the highest in the company's history, marking our fourth consecutive year of record performance," said CEO Bob Iger commenting on the results. "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."