Walt Disney Co. (DIS), the world’s largest theme-park company, is seeking acquisitions, a year and a half after completing its $4.2 billion takeover of Marvel Entertainment’s cast of film and comic-book characters.
“We don’t have what I’d call a strategic hole,” Chief Executive Officer Robert Iger said yesterday on a conference call after the company’s third-quarter earnings release. “But we’ve looked expansively at opportunities across the world to buy either new characters or businesses that are capable of creating great characters and great stories.”
Iger didn’t specify any targets. He cited international as an area of interest, and India as “another example of a high- growth market. We think investing in it, at least in today’s world, is a smart move,” Iger said.
Disney is in the middle of a regulatory review of its proposal to buy the 49.6 percent of UTV Software Communications Ltd. (UTV), a Mumbai-based film and TV production company, that it doesn’t own for as much as 20.1 billion rupees ($445 million).
From fiscal 2006 to 2010, Burbank, California-based Disney has spent $13 billion on acquisitions, Iger said. The company now puts a $23 billion enterprise value on those purchases, he said.
“He’s been smart about buying assets that contribute to the core of the company,” said Bill Smead, chief investment officer of Seattle-based Smead Capital Investment, which owns 57,813 shares of Disney. “He hasn’t overpaid, and he has created value.”
Disney acquired Pixar Animation for $8.06 billion in stock in 2006, a deal announced three months after Iger assumed the CEO’s job. The company completed the Marvel acquisition in January 2010 and acquired the Internet casual game company Playdom in August 2010 for $563 million in cash.
Iger spoke after Disney posted third-quarter sales and profit that beat analysts’ estimates as pay-TV fees to the ESPN sports network countered flat cable advertising sales.
Net income rose 11 percent to $1.48 billion, or 77 cents a share, from $1.33 billion, or 67 cents, a year ago, Disney said yesterday in a statement. Profit excluding some items was 78 cents, beating the 73-cent average of 22 analysts’ estimates compiled by Bloomberg.
Cable-network earnings rose 10 percent, with ESPN enjoying gains in fees from pay-TV systems. Theme-park profit advanced 8.8 percent, fueled by higher admission prices at U.S. resorts and this year’s later Easter break. The consumer products unit boosted profit with sales of “Cars” and Marvel merchandise.
Sales in the period ended July 2 gained 6.7 percent to $10.7 billion, exceeding analysts’ projections of $10.5 billion.
Disney fell 5 cents to $34.65 at 7:34 a.m. before the open of the New York Stock Exchange, after gaining 5.1 percent to $34.70 yesterday. The shares had declined 7.5 percent this year before today.
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