Disney’s spring quarter earnings were released at the same time as the news about Club Penguin. The company’s net income rose 14 percent, to $1.18 billion from $1.3 billion in the same quarter last year, aided by a one-time gain related to the Pixar acquisition.  Revenues were up 7 percent, to $9.05 billion from $8.47 billion the previous year.

Media Networks and theme parks led the segments in operating income increases with consumer products showing the greatest revenue increase—23 percent. Within Media Networks, cable revenue was up 4 percent while broadcasting rose 9 percent. Broadcasting’s operating income jump was dramatic—to $295 million from $130 million but cable, led by ESPN, continues to provide the bulk with $1.1 billion, up $88 million for the quarter.

—For MVNO watchers, operating income for ESPN “benefited from lower costs associated with mobile phone operations, which have transitioned to a licensing model since the prior-year period.” But broadcasting’s increases “were partially offset by increased costs associated with the Disney-branded mobile phone service.”

From the earnings call: CFO Tom Staggs: “... We are investing, as you know, considerably in our digital initiatives. The Internet group in particular and as those initiatives mature, I think you will start to see that turn in terms of being a margin contributor as opposed to the opposite that we are experiencing now. Club Penguin by the way is a nice exception, it actually has a nice margin already and it is a business that obviously we hope to grow it further.”
http://amedia.disney.go.com/investorrelations/2007_q3.pdf” title=“Earnings release”>Earnings release| Webcast | Transcript