Disney’s fiscal Q2 beats expectations


DisneyDisney just keeps on trucking: Revenue in the fiscal Q2 grew to $10.55 billion from $9.63 billion last year. Analysts surveyed by FactSet had expected fiscal second-quarter earnings of 77 cents a share on revenue of $10.49 billion.

The company reported a 32% increase in net income during the January-March quarter.

Q2 earnings jumped to $1.51 billion, or 83 cents a share, from $1.14 billion, or 63 cents a share, in the year-ago period, a rise of 32%. Adjusted earnings per share was 79 cents, up 36% from 58 cents a year earlier, excluding special items. That beat Wall Street expectations as well.

“With adjusted earnings per share up 36 percent over last year, we’re obviously pleased with our second quarter,” Chairman and CEO Robert Iger said in a statement reported by the LA Times. “Our results reflect our successful strategy, the strength of our brands and the value of our high-quality creative content, all of which continue to drive long-term growth and shareholder value.”

Disney’s Media Networks Group, which includes ABC and ESPN, posted an operating income of $1.86 billion, up 8%. Revenue rose 6% to $4.96 billion, although the broadcast division saw operating income fall 40% to $138 million — due in part to higher prime-time programming costs.

Operating income at Cable Networks increased $224 million to $1.7 billion for the quarter due to growth at ESPN. Higher operating income at ESPN was due to increased affiliate revenues and, to a lesser extent, higher advertising revenues, partially offset by increased programming and production costs.

Increased affiliate revenues at ESPN were primarily due to contractual rate increases, a reduction in revenue deferrals as a result of changes in provisions related to annual programming commitments incertain affiliate contracts and international subscriber growth. During the quarter, ESPN deferred $120

million of revenue compared to $190 million in the prior-year quarter. Growth in ESPN ad revenues was primarily due to an increase in units sold and higher rates.

The company’s movie studio had a strong quarter, posting operating income of $118 million. The studio said it performed well in part due to the release of “Oz The Great and Powerful,” which has grossed $228.9 million domestically and $256.2 million abroad. A year earlier, the film studio posted an operating loss of $84 million — the result of a $200 million write-down on the sci-fi movie “John Carter.” Worldwide theatrical distribution results reflected the strong performance of Oz The Great And Powerful and Wreck-it Ralph in the current quarter compared to John Carter in the prior-year quarter.

Disney’s parks and resorts posted operating income of $383 million — a gain of 73% from a year earlier. Disney said the strong performance was largely due to an increase in business at its domestic properties.

The interactive division posted an operating loss of $54 million, a slight improvement from the same quarter a year earlier, when it lost $70 million. Revenue was up 8% to $194 million.