Disney Posts Strong Q1 Results

BURBANK: The Walt Disney Company has reported a 19 percent rise in profit for its first fiscal quarter, earning $2.18 billion, as the animated hit Frozen continues to deliver for home entertainment and toy sales.

Revenue for the quarter ended December 27, 2014, was up 9 percent at $13.39 billion. Growth at its media networks and parks and resorts divisions helped to offset a slight dip in revenue from studio entertainment.

Media networks revenues for the quarter increased 11 percent to $5.9 billion and segment operating income increased 3 percent to $1.5 billion. Operating income at cable networks decreased 2 percent to $1.3 billion for the quarter due to a decrease at ESPN, partially offset by increases at the worldwide Disney Channels and ABC Family. Operating income at broadcasting increased 35 percent to $240 million for the quarter thanks to an increase in affiliate fees and higher program sales. These increases were partially offset by lower advertising revenue.

Parks and resorts revenues for the quarter were up 9 percent to $3.9 billion and segment operating income gained 20 percent to $805 million. Operating income growth for the quarter was driven by an increase at the domestic operations, partially offset by a decrease at the international operations.

Studio entertainment revenues for the quarter were down 2 percent to $1.9 billion and segment operating income was up 33 percent to $544 million. Higher operating income was due to an increase in home-entertainment results, higher revenue share with the consumer products segment due to the performance of Frozen merchandise and higher TV/SVOD distribution results driven by more titles available internationally. These increases were partially offset by lower theatrical distribution results (reflected in the performance of Big Hero 6 in the current quarter compared to Frozen in the prior-year quarter).

Consumer products revenues for the quarter increased 22 percent to $1.4 billion and segment operating income increased 46 percent to $626 million. Higher operating income was due to increases at the merchandise licensing and retail businesses. The increase in operating income at merchandise licensing was due to the performance of merchandise based on Frozen.

Interactive revenues for the quarter decreased by $19 million to $384 million and segment operating income increased by $20 million to $75 million.

“This was yet another incredibly strong quarter for our company, with diluted EPS up 23 percent driven by record revenue as well as significant growth in segment operating income,” said Robert A. Iger, the chairman and CEO of The Walt Disney Company. “Our results once again reflect the strength of our brands and high-quality content and demonstrate that our proven franchise strategy creates long-term value across all of our businesses.”