Disney breaks out interactive results
The Walt Disney Co drew kudos from analysts in an otherwise dismal earnings report for breaking out results for its Interactive Media Group for the first time.
The unit, made up of its console, mobile and online gaming operations and Disney.com, turned in an 18 percent revenue increase but operating profit dropped after the soft retail environment, competition for consumers’ time and Disney’s “substantial” investment in the product lines were factored in.
The decision to break out the unit’s results — it comprises just 3 percent of Disney’s total revenue, according to one analyst — came in the same quarter in which Disney CEO Bob Iger warned investors that its older media businesses — DVD sales and broadcast television — face “secular changes” from which they may never recover.
Disney CFO Tom Staggs said the company plans to invest upwards of $200 million in video games development in 2009, and a more “modest” increase in spending on Disney.com and in virtual worlds like Club Penguin.
The new transparency by the often tactiturn Disney management struck Barclays Capital analyst Anthony DiClemente as a good thing in a “modestly disappointing” first quarter earnings report.
“As an analyst I love to see that because it gives some more transparency into the digital businesses and the profitability of those digital businesses,” DiClemente said.