Disney Soars On Great Q3 Numbers. At ABC, Cable Income Dipped

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The Walt Disney Co.’s stock enjoyed a strong Friday, as the diversified entertainment and communications company that owns ABC and its ESPN arm on Thursday afternoon delivered quarterly earnings that topped analysts’ estimates.


How did the Broadcasting division perform? Over-the-air TV performed better in the quarter.

For the quarter ending July 3, 2021, its fiscal Q3 ’21, revenue jumped to $17.02 billion from $11.78 billion as the company swung to net income attributable to Disney of $918 million ($0.50 per diluted share), from a fiscal Q3 2020 net loss of $4.72 billion (-$2.61).

Analyst Richard Dvorak from DailyFX.com tells RBR+TVBR he expected Disney to report quarterly results of $0.56 earnings per share on $16.8 billion in revenue. Thus, the EPS is a bit of a miss, while the revenue beat his estimates.

Contributing in part to those results is the Linear Networks arm of the Disney Media and Entertainment Distribution segment. And, within that arm, is the Domestic Channels division.

Domestic Channels revenue for the quarter increased 13%, to $5.6 billion. However, operating income decreased 37% to $1.8 billion. The decrease in operating income was due to a decrease at Cable and, to a lesser extent, at Broadcasting.

This suggests that the Disney Channel and, in particular, ESPN, continue to present challenges for The Walt Disney Co. as a whole. It explained that the decrease at Cable was due to higher programming and production costs and to a lesser extent, an increase in marketing costs.

Yes, programs such as Secrets of Sulphur Springs are back in production for Disney Channel. But, the increase in programming and production costs is clearly tied to ESPN, as the company pointed the figure at the return of live NBA and Major League Baseball sports events canceled or delayed in the prior-year quarter due to COVID-19.

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Meanwhile, the decrease at Broadcasting was due to lower results at the ABC network, and were partially offset by growth at the owned television stations, such as WABC-7 in New York, which continues to be the home of the nation’s most-watched local morning news program.

The network was also faced with higher programming and production costs as the shift in the Academy Awards telecast to calendar-year Q2 from Q1, as normally seen, shifted expenses around.