Disney’s Q1 numbers ride on parks and resorts segment

BENGALURU: The Walt Disney Company (Disney) reported 3.8 per cent year-on-year (yoy) increase in revenue and 0.5 per cent yoy increase in operating income before taxes for the quarter ended 31 December 2017 (Q1 2018, the quarter under review) as compared with the corresponding year ago quarter (quarter ended 31 December 2016, Q1 2017). Net income attributable to Disney, however, increased by 78.4 per cent yoy. Diluted earnings per share (EPS) for the quarter increased by 88 per cent to USD 2.91 from USD 1.55 in the prior-year quarter. Excluding a USD 1.6 billion one-time net tax benefit associated with new US federal income tax legislation (tax act) and certain other items affecting comparability, EPS for the quarter rose by 22 per cent to USD 1.89 from USD 1.55 in the prior-year quarter.

Four segments—media networks, parks and resorts, studio entertainment, and consumer products and interactive media—contribute to Disney’s numbers. Except for the parks and entertainment segment, the other three segments reported a decline in segment income. Disney’s total revenue for the quarter under review was USD 15,351 million as compared with USD 14,784 million. Revenue from services increased by 4.7 per cent yoy to USD 12,984 million from USD 12,406 million while revenue from products declined by 0.5 per cent yoy to USD  2,367 million from USD 2,378 million.

Segment operating income in Q1 2018 was USD 3,745 million as compared to USD 3,725 million in Q1 2017. Net income attributable to Disney in the quarter under review was USD 4,423 million as compared to USD 2,479 million in Q1 2017.

Media Networks

Two divisions contribute to Media Networks numbers - cable networks, and broadcasting. Media networks' revenue for the quarter was flat at USD 6,243 million in Q1 2018 as compared to USD 6,233 million. Segment operating income declined 12.4 per cent yoy in Q1 2018 to USD 1,193 million from USD 1,162 million.

Cable networks revenue increased 1.5 per cent yoy to USD 4,493 million from USD 4,428 million, while income declined 0.7 per cent yoy to USD 858 million from USD 864 million. The company says that lower operating income was due to a loss at BAMTech and a decline at ESPN, partially offset by growth at the Disney channels and Freeform. The decrease at ESPN was due to lower advertising revenue, partially offset by affiliate revenue growth and lower programming costs. Lower advertising revenue was due to a decrease in impressions and lower rates. Growth at the Disney channels and Freeform was driven by higher affiliate revenue and lower marketing costs. Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers.

The broadcasting division’s revenue for the quarter under review declined by 3 per cent yoy to USD 1,750 million in Q1 2018 from USD 1,805 million. Income decreased by 24.8 percent yoy to USD 285 million from USD 379 million. The company said that the decrease in operating income was due to lower advertising revenue, higher production cost write-downs, and a decline in programme sales income. These decreases were partially offset by affiliate revenue growth due to rate increases. Advertising revenue reflected fewer network impressions and lower political advertising at Disney-owned television stations, partially offset by higher network rates.

Parks and resorts

Revenue from parks and resorts for the quarter increased by 13.2 per cent yoy in Q1 2018 to USD 5,154 million from USD 4,555 million while segment operating income increased by 21.4 per cent yoy to USD 1,347 million. The company said that operating income growth for the quarter was due to increase at Disney’s domestic parks and resorts, cruise line and vacation club businesses as well as at Disneyland Paris.

Domestic results benefited from the comparison to the impact of Hurricane Matthew, which occurred in the prior-year quarter. Higher operating income at domestic parks and resorts was driven by guest-spending growth and

an increase in attendance, partially offset by higher costs. Guest-spending growth was due to higher average ticket prices, food, beverage and merchandise spending and average daily hotel room rates.

Studio entertainment

Studio entertainment revenue dipped by 0.6 per cent yoy to USD 2,504 million in Q1 2018 from USD 2,520 million and segment operating income declined 1.5 per cent yoy to USD 829 million from USD 842 million. The company said that an increase in theatrical distribution results was more than offset by decreases in home entertainment and TV/SVOD distribution results as well as lower income from consumer products and interactive media segment revenue share.

Consumer products and interactive media

Revenue declined by 1.8 per cent yoy to USD 1,450 million in Q1 2018 from USD 1,456 million and segment operating income declined by 3.9 per cent yoy to USD 617 million from USD 642 million. The company said that operating income reduced due to decreases at Disney’s merchandise licencing and retail businesses, partially offset by an increase at its games business. The decrease in merchandise licencing was due to unfavourable timing of minimum guarantee shortfall recognition and lower licencing revenue from merchandise based on Frozen and Finding Nemo/Dory, partially offset by increases from merchandise based on Cars and Star Wars. Disney’s retail business was affected by unfavourable foreign currency fluctuations. The increase at Disney’s games business was due to licencing revenue from Star Wars Battlefront II, which was released in the current quarter, whereas there was no comparable release in the prior-year quarter.

Company speak

“The strategic investments we’ve made have driven meaningful growth over the long term, and we remain confident in our ability to continue to deliver significant shareholder value,” said  Disney’s chairman and CEO Robert A Iger, “We’re excited about what lies ahead, with a robust film slate, the launch of our ESPN direct-to-consumer business, new investments in our theme parks, and our pending acquisition of Twenty-First Century Fox.”

Also Read:

Disney to buy 21st Century Fox assets for $52.4 billion

Disney to launch English GEC HD on 29 Oct

Latest Reads
Sony Sab strengthens primetime slot with 'Baavle Utaavle'

Sony Sab is all set to launch its new show, Baavle Utaavle, #Gufu Ki Visfotak Love Isstory, produced by Director’s Kut production house Rajan Shahi. The show will go on air on 18 February, every Monday to Friday at 10 pm.

Television TV Channels GECs
TV9 enters Hindi heartland with TV9 Bharatvarsh

TV9 News Network is all set to launch its national Hindi channel, TV9 Bharatvarsh, next month in Delhi. The channel is ready with its largest news studio in the country, which will use the best of AR and VR technologies, and BOT news tracker in its presentation.

Television TV Channels News Broadcasting
Tariff order implementation: Pay channels' connectivity drops ranging from 61% to 0.5% across genres

The ongoing flux in the broadcast sector due to the new TRAI tariff order implementation has had a significant impact on the connectivity of pay channels in the country. After the new regulatory framework kicked in on 1 February, pay channels’ connectivity witnessed a drop ranging from 61 per cent...

Television TV Channels Viewership
Pro Volleyball League attracts 14.3 mn viewers in week 1 on TV

The first leg of RuPay Pro Volleyball League (PVL) which happened in Kochi witnessed 14.3 million viewers sample the league on Sony Pictures Network (SPN) India.

Television TV Channels Sports
MTV associates with Brave Combat Federation for 'Brave 20'

MTV, India’s youth brand, is all set to bring the fight series MTV Brave 20 in association with the Brave Combat Federation presented by Mercury Sports Entertainment on 17 February at 9 pm.

Television TV Channels Music and Youth
Q3 2019: BAG Films Television and Radio Dhaamal profits up

The Anurradha Prasad-led BAG Films and Media Ltd (BAG Films) reported 38.1 per cent higher year-on-year (y-o-y) consolidated revenue for the quarter ended 31 December 2018 (Q3- 019, period or quarter, under review) at Rs 48.67 crore as compared to Rs 33.94 crore in the corresponding prior year...

Television TV Channels News Broadcasting
Comcast, Sony in the running for ZEEL stake?

In the latest financial results, Zee Entertainment Enterprises Ltd (ZEEL) MD and CEO Punit Goenka mentioned that the company has narrowed down its search for a partner to divest up to 50 per cent stake in the company, an announcement it made in November 2018.

Television TV Channels GECs
9X Jalwa launches Jalwa #10YEARCHALLENGE

MUMBAI: 9X Jalwa, the Bollywood hits music channel by 9X Media, has created Jalwa #10YEARCHALLENGE, a unique property that showcases the songs of Bollywood stars from past to present. Jalwa #10YEARCHALLENGE will feature stars such as Aamir Khan, Aishwariya Rai, Kajol, Akshay Kumar, Salman Khan,...

Television TV Channels Music and Youth
CNN meets the young Lionel Messi fan from Afghanistan who is now a Taliban target

In January 2016, a photo of young Murtaza Ahmadi went viral, thanks to his makeshift version of an Argentine football shirt of his idol Lionel Messi. The photo earned the child two autographed shirts, a signed football and a meeting with the footballer in Qatar 11 months later.

Television TV Channels News Broadcasting

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories