Disney Earnings Beat Wall Street Expectations
It’s a good time to be the Walt Disney Company.
On Wednesday, the company released its first earnings report since wrapping up its $71.3 billion deal to buy much of 21st Century Fox’s film and television assets. It was a boffo quarter for the media giant behind Pixar, ESPN, and Marvel, one that saw Disney handily beating expectations as it logged revenues of $14.9 billion on earnings per share of $1.61.
Wall Street analysts projected that the company would post quarterly earnings of $1.58 a share on sales of $14.5 billion. The robust earnings picture goosed Disney’s stock in after-hours trading, sending it above $136 a share. Quarterly revenues were up 3% and earnings per share increased 13%.
The company attributed the stronger-than-expected results to increased operating income from ESPN and the popularity of its domestic resorts. That helped off-set declines in its broadcasting division where lower viewership at ABC took a bite out of ad sales. It also cushioned the drop in its film business. Disney fielded a massive blockbuster in the $1.2 billion-grossing “Captain Marvel,” but even that windfall couldn’t match the combined success of “Black Panther” and “Star Wars: The Last Jedi,” which did a massive amount of their business in the prior-year quarter.
It’s a time of enormous change at the entertainment conglomerate. Not only is it absorbing Fox into its global operations, it is also preparing to launch Disney Plus, a new streaming service that will undercut Netflix with its $6.99 monthly pricing. Disney’s stock has been on a tear in recent weeks, rising more than 20% as its market capitalization has topped $240 billion.
The Fox acquisition is expected to result in thousands of job losses, but so far staffing cuts have been enacted at a slower pace than anticipated. After assuming control of Fox, Disney did lay off many senior staffers on the film side, but the layoffs haven’t been as deep as expected.
At the same time that Disney was unveiling its financial results, Fox Corp. the Murdoch family’s remaining assets after selling much of their entertainment brands, unveiled their quarterly earnings. The new company, which includes Fox broadcasting and Fox News, earned $529 million in net income and earnings-per-share of 76 cents.
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