Disney Posts Record Quarterly Earnings

BURBANK: The Walt Disney Company reported record quarterly earnings of $2.9 billion for its first fiscal quarter, thanks in part to the global success of Star Wars: The Force Awakens.

Net income in the quarter rose 32 percent to $2.88 billion. “Driven by the phenomenal success of Star Wars, we delivered the highest quarterly earnings in the history of our company, marking our tenth consecutive quarter of double-digit EPS growth,” said Robert A. Iger, the chairman and CEO of The Walt Disney Company. “We’re very pleased with our results, which continue to validate our strategic focus and investments in brands and franchises to drive long-term growth across the entire company.”

Media Networks revenues for the quarter increased 8 percent to $6.3 billion, with higher advertising and affiliate revenues. Segment operating income was down 6 percent to $1.4 billion. Advertising revenue growth was due to an increase in units sold and higher rates, partially offset by lower ratings. Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers and unfavorable foreign currency impacts.

Cable Networks revenues for the quarter were up 9 percent to $4.5 billion and operating income decreased 5 percent to $1.2 billion due to a decrease at ESPN and lower equity income from A&E, partially offset by growth at the U.S. Disney Channels. The increase at the domestic Disney Channels was due to higher program sales in the current quarter and affiliate revenue growth, partially offset by higher programming costs. Increased programming costs were driven by higher costs for original programming.

Broadcasting revenues for the quarter increased 7 percent to $1.8 billion and operating income decreased 7 percent to $223 million due to higher programming costs and an increase in equity losses from Hulu, partially offset by advertising and affiliate revenue growth and higher program sales. The increase in programming costs was due to a higher average cost of new scripted programming and the costs of airing New Year’s Eve specials that aired in the second quarter of the prior year.

Parks and Resorts revenues for the quarter increased 9 percent to $4.3 billion and segment operating income increased 22 percent to $981 million. Operating income growth for the quarter was due to an increase at the domestic operations, partially offset by a decrease at the international operations.

Within the Studio Entertainment segment, revenues for the quarter increased 46 percent to $2.7 billion and segment operating income was up 86 percent to $1 billion. Higher operating income was due to an increase in theatrical distribution results, a higher revenue share with the Consumer Products & Interactive Media segment, growth in TV/SVOD distribution and increased home entertainment results. The increase in theatrical distribution results and higher revenue share with the Consumer Products & Interactive Media segment were due to the strong performance of Star Wars: The Force Awakens in the current quarter. Higher TV/SVOD distribution results were driven by international growth and the increase in home entertainment results was due to sales of Star Wars classic titles.

Consumer Products & Interactive Media revenues for the quarter increased 8 percent to $1.9 billion and segment operating income increased 23 percent to $860 million. Higher operating income was due to growth at the merchandise licensing business and, to a lesser extent, at the publishing and games businesses, partially offset by a decrease at the retail business and the impact of foreign currency translation.