Disney Q1 Better Than Expected; Games Division Helps

The company reported net income of $256 million (13 cents a share), down from $438 million (21 cents a share) last year -- a per-share earnings drop of 38 percent. Revenues increased 6% to $7.5 billion. Of note, the company's consumer products division (which records revenues from Disney's videogame business) saw revenues decrease by 6% to $787 million, but increased its operating income by 9%, to $190 million. Disney said increases in worldwide merchandise licensing revenue and improvements at Disney Interactive resulted in improvements to the bottom line, and called out its Kingdom Hearts videogame as a specific success story. Hurting the company were its cable results, reflecting higher programming costs for NFL, MLB and NBA sports programming, and its studio entertainment division, which saw a decrease in worldwide theatrical film distribution. Because Disney's results were better than Wall Street was expecting, its stock is up $1.13 (7%) in midday trading, to $17.48.