Walt Disney’s fiscal third quarter was its best ever—earnings per share grew 31 percent to $1.01, beating Wall Street expectations by 8 cents. We sat down with CEO Bob Iger to talk about what drives the upside.

Bottom line: People are still willing to spend for quality, Iger said, as people are flocking to Disney parks and spending more money there. The advertising business is looking better, though there’s not much visibility. And "The Avengers," which has grossed nearly $1.5 billion worldwide, drove massive growth at the studio division.

Disney’s revenue increased 4 percent to $11.2 billion, not the 6-percent increase Wall Street expected. But Iger said that shortfall was partly due to a change in the way the ESPN affiliate fee revenue was recognized, which shifted $140 million out of the quarter. Disney does not provide guidance.

Iger said that economic weakness in Europe is impacting business, with modest declines in visits to its parks, the business segment most susceptible to economic volatility. But Asia has been delivering strong results and in the US, the strength of Disney’s brands seems to be outweighing economic weakness. Iger saying they see consumers “willing to step up and pay for products they believe in.” The key is that the company has to continue to invest—in attractions like the new Cars Land.

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