by Ray Keating
News/Analysis
DisneyBizJournal.com
May 7, 2024
The Walt Disney Company had a solid earnings report for its second quarter ending March 30, 2024.
Total revenues were up by 1 percent in the quarter versus the same quarter in the previous year, i.e., $22.8 billion compared to $21.8 billion. And diluted earnings per share excluding certain items beat expectation, rising by 30 percent, i.e., $1.21 versus $0.93.
A goodwill impairment issue having to do with Star India operations did hit earnings. As The Wall Street Journal reported: “The company took a roughly $2 billion charge in the March quarter related to the India deal and to its linear television networks and swung to a loss of $20 million, from net income of $1.27 billion a year earlier.”
The company’s earnings per share growth target for the full year stands at 25 percent.
On the streaming front, losses shrank notably in the quarter, and Disney+ core subscribers increased by 6 million to 117.6 million. Total Hulu subscribers increased from 49.7 million to 50.2 million. Meanwhile, ESPN+ subscriptions were down slightly (from 25.2 million to 24.8 million), though average monthly revenue per paid subscriber increased due to “retail pricing and higher advertising revenue.” The ESPN+ subs decline was attributed to “seasonality,” by Disney CFO Hugh Johnston.
Disney CEO Bob Iger was quoted in the company’s statement: “Our results were driven in large part by our Experiences segment as well as our streaming business. Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4.” The company acknowledged that the forthcoming third quarter will return to streaming losses, including a decline in Disney+ subscribers, but again, followed by a fourth quarter bounce back.
Iger also remained bullish on sports and ESPN, asserting that ESPN programming is solid for the coming decade.
The Experiences division – parks and resorts, cruise line and consumer products – stood out as a growth driver, “with revenue growth of 10%, segment operating income growth of 12%, and margin expansion of 60 basis points versus the prior year,” and the company continues “to expect robust operating income growth at Experiences for the full year.” Iger noted that “we are turbocharging growth in our Experiences business with a number of near- and long-term strategic investments.”
Revenue growth at domestic parks grew by 29 percent in the second quarter versus the same period last year, and operating income rose by 87 percent.
CFO Johnston noted that the Experiences division will face some challenges in the coming quarter, namely, higher wages, increased costs due to cruise line expansions, and some demand moderation due to a return to pre-COVID levels. Healthy, strong growth is expected, but there is some demand normalization, along with near-term one-time expenses.
Finally, it's also worth noting that Iger’s emphasis regarding Marvel looking ahead was on reining in content, that is, to two, perhaps three, movies per year, as well as a couple of streaming shows per year.
__________
Ray Keating is the editor, publisher and economist for DisneyBizJournal.com; and author of the Pastor Stephen Grant thrillers and mysteries, the Alliance of Saint Michael novels, and assorted nonfiction books. Have Ray Keating speak your group, business, school, church, or organization. Email him at raykeating@keatingreports.com.
The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?
The Disney Planner: The TO DO List Solution combines a simple, powerful system for getting things done with encouragement and fun for Disney fans, including those who love Mickey, Marvel, Star Wars, Indiana Jones, Pixar, princesses and more.
Never miss any new book by Ray Keating by joining the Pastor Stephen Grant Fellowship with Ray Keating at
https://www.patreon.com/pastorstephengrantfellowship.
Various books by Ray Keating…
• The Pastor Stephen Grant thrillers and mysteries. There are 19 books in the series now.
• Cathedral: An Alliance of Saint Michael Novel is at Amazon.
• Order The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist, and The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist at Amazon.com.
• Signed editions of Ray’s books are at www.raykeatingbooksandmore.com.
Also, check out Ray’s podcasts – the Daily Dose of Disney, Free Enterprise in Three Minutes, and the PRESS CLUB C Podcast.
No comments:
Post a Comment