Disney’s profitable efforts
Operating profit for the entertainment segment, which incorporates the film studio and parts of the tv division, nearly tripled to $1.2 billion. (All figures are in U.S. currency.) Disney’s box office success continues, giving the corporate its two highest-grossing movies of the yr.
The Walt Disney Co. said Wednesday that its direct-to-consumer business, which incorporates Disney+ and Hulu, posted a quarterly operating lack of $19 million, sharply narrower than the $505 million loss a yr earlier. Revenue rose 15% to $5.81 billion. The results got here a day after Disney said it might raise prices for Disney+, Hulu and ESPN+ starting Oct. 17. Disney+ and Hulu will each cost $9.99 a month with ads, a $2 increase for every plan. The ad-free version of Disney+ will cost $15.99 a month, a $2 increase, while Hulu will cost $1 more, at $18.99 a month for the ad-free version. ESPN+, which is accessible only with ads, will cost $11.99 a month, a $1 increase. (Read: The best streaming services in Canada: The value of every one – plus a couple of free ones)
Disney earnings highlights
- Disney (DIS/NYSE) earned $2.62 billion, or $1.43 per share, for the period ended June 29. A yr earlier, it lost $460 million, or 25 cents per share. Excluding one-time gains, earnings were $1.39 per share, well above the $1.20 expected by Zacks Investment Research. Revenue for the Burbank, Calif.-based company rose 4% to $23.16 billion, beating Wall Street’s estimate of $22.91 billion.
Investor reactions and management comments
Disney’s stock was under pressure in early trading as some weakness was evident in its domestic parks, a part of its Experiences division, which incorporates six global theme parks, the cruise line, merchandise and video game licenses. The company warned that the slowdown in demand at its U.S. parks could proceed for the following few quarters. It expects Experiences’ operating profit to say no by a mid-single-digit percentage within the fourth quarter compared with the identical period last yr, attributable to the slowdown in its domestic parks, in addition to the economic slowdown in China and fewer visitors to Disneyland Paris attributable to the impact of the Olympics on normal consumer travel patterns.
Johnston said through the company’s conference call that the parks are affected by the financial stress of lower-income consumers, while higher-end consumers at the moment are doing a bit more international travel. Domestic parks and experiences operating income declined 6%, while international parks and experiences operating income rose 2%. Domestic parks revenue increased 3% within the third quarter. International parks revenue increased 5%. Disney said the decline in domestic parks and experiences operating income was attributable to increased costs attributable to inflation, technology spending and latest guest offerings.
The company generated operating revenue of $254 million from content sales and licensing, helped by the strong box office success of Inside Out 2, which is now the highest-grossing animated film of all time with worldwide revenue of over $1.5 billion.
Disney said Wednesday that the unique, which got here out in 2015, has contributed to greater than 1.3 million Disney+ signups and over 100 million views worldwide for the reason that first teaser trailer for “Inside Out 2” was released.
The combined streaming firms, which include Disney+, Hulu and ESPN+, achieved profitability for the primary time due to three strong months for ESPN+ and better-than-expected quarterly performance from the direct-to-consumer unit.
CEO Bob Iger and Senior Executive Vice President and CFO Hugh Johnston said in prepared remarks that ESPN’s primetime third quarter was the most-watched third quarter in a decade amongst 18-49 yr olds, driven by strong rankings across several areas, including the NBA Finals, WNBA Draft, NHL Playoffs and Stanley Cup Finals.
