Walt Disney beats by $0.04, beats on revs
- Reports Q2 (Mar) earnings of $1.61 per share, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of $1.57; revenues rose 2.6% year/year to $14.92 bln vs the $14.53 bln S&P Capital IQ Consensus.
- Cable Networks Cable Networks revenues for the quarter increased 2% to $3.7 billion and operating income increased 2% to $1.8 billion. Higher operating income was due to an increase at ESPN. The increase at ESPN was due to higher affiliate revenue, partially offset by an increase in programming and production costs and a decrease in advertising revenue. Affiliate revenue growth reflected contractual rate increases, partially offset by a decline in subscribers. The increase in programming and production costs was due to contractual rate and production cost increases, partially offset by the benefit of a shift in the mix of College Football Playoff (CFP) games.
- Broadcasting revenues for the quarter decreased 2% to $1.8 billion and operating income decreased 29% to $247 million. The decrease in operating income was due to higher programming costs, lower program sales and a decrease in advertising revenue, partially offset by higher affiliate revenue from contractual rate increases. Higher programming costs were due to an increase in production cost write-downs and in the average cost of network programming.
- Parks, Experiences and Products revenues for the quarter increased 5% to $6.2 billion and segment operating income increased 15% to $1.5 billion Studio Entertainment revenues for the quarter decreased 15% to $2.1 billion and segment operating income decreased 39% to $534 million. Lower operating income was due to a decrease in theatrical and home entertainment distribution results, partially offset by an increase in TV/SVOD distribution.
- Direct-to-Consumer & International revenues for the quarter increased 15% to $955 million and segment operating loss increased from $188 million to $393 million. The increase in operating loss was due to our ongoing investment in ESPN+, which was launched in April 2018, costs associated with the upcoming launch of Disney+, a loss from the consolidation of Hulu and higher losses from streaming technology services, partially offset by an increase at our International Channels.