Disney Reports Record Revenue, Net Income and Earnings Its Fiscal Q4

Just weeks before Thanksgiving, Mickey Mouse and company have much to be grateful for, as The Walt Disney Company (NYSE: DIS) reports its fourth

Subscription News: Disney Reports Record Revenue

Source: The Walt Disney Company

Just weeks before Thanksgiving, Mickey Mouse and company have much to be grateful for, as The Walt Disney Company (NYSE: DIS) reports its fourth quarter and fiscal year 2018 results for the period ended September 29, 2018. Among the quarterly highlights are record revenues of $14.3 billion, a 12 percent increase, net income of $2.3 billion, a 33 percent increase, and diluted earnings per share of $1.55, a 37 percent increase.

“We’re very pleased with our financial performance in fiscal 2018, delivering record revenue, net income and earnings per share,” said Disney chairman and CEO Robert A. Iger in a November 8 news release. “We remain focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business, including the highly anticipated launch of our Disney-branded streaming service late next year.”

Here are quarterly results compared to annual results for the quarter and year ended September 29, 2018, respectively:

 

Fourth Quarter 2018

Fiscal Year 2018

Revenues

$14.3 billion

$59.4 billion

Net Income

$2.3 billion

$12.6 billion

Diluted Earnings Per Share

$1.55 EPS

$8.36 EPS

Cash from Operations

$3.9 billion

$14.3 billion

Free Cash Flow

$2.7 billion

$9.8 billion

Revenues are broken down into four business segments. Here is the revenue, broken down by segment, for the fourth quarter:

Business Segment

Q4 Revenue

Percent Change Year-Over-Year

Media Networks

$6.0 billion

9%

Parks and Resorts

$5.0 billion

9%

Studio Entertainment

$2.2 billion

50%

Consumer Products and
     Interactive Media

$1.1 billion

(8)%

Media Networks is comprised of Cable Networks and Broadcasting. Cable Networks had revenue of $4.1 billion, a 5 percent increase. The company had lower operating income because of the consolidation of BAMTech, but that was partially offset by increases at Disney Channels and its Freeform network. Results at ESPN were comparable to the fourth quarter of 2017. ESPN had higher affiliate revenue but that was offset, in part, due to lower subscribers and lower advertising revenue.

Broadcasting revenue was $1.8 billion, a 21 percent increase, primarily due to the sale of two Marvel series and the show Black-ish. The Media Networks business segment also suffered a $10 million loss due to higher than expected losses from Hulu and lower income from A+E Television Networks. Disney attributed the Hulu losses to higher programming, marketing and labor costs which were offset by higher subscription and advertising revenue.

On the November 8 earnings call, Iger focused on the companies top two priorities in fiscal year 2019: the completion and integration of the 21st Century Fox acquisition and Disney’s direct-to-consumer (DTC) business. The DTC business includes the six-month-old ESPN+, a majority stake in Hulu and Disney’s DTC-branded service coming late next year.

So far, Disney has received regulatory approval in the European Union, and he hopes to receive regulatory approval in additional countries to complete the transaction. Disney will retain a number of executives from 21st Century Fox once the transaction is complete.

Iger is pleased with the early success of ESPN+ which has already signed up more than 1 million subscribers.

“The early growth trajectory of ESPN+ is very encouraging, and we believe it bodes very well for our overall, global DTC strategy,” Iger said on the earnings call.

Iger also announced the name for the company’s Disney-branded over-the-top TV service. It will be called Disney+ and it will include original Disney programming along with Pixar, Marvel, Star Wars and National Geographic and access to Disney’s film and TV library and all new 2019 theatrical releases. Among the highlights are a reimagined High School Musical live-action series, the Star Wars animated series Clone Wars and a series based on Monsters, Inc.

“As with ESPN+, the launch of Disney+ will just be the starting point – we plan to continually elevate the experience and enhance the value to consumers with a constant pipeline of exclusive new content as we move forward,” Iger added.

Investors weren’t overly excited about the news. On November 8, Disney stock was valued at $116.00. As of 6:09 p.m. Eastern yesterday, Disney stock was $116.70 per share. This is still an appreciable increase of Disney’s stock as of November 13, 2017 when it was valued at $104.74 per share.

 Net Income and Earnings Its Fiscal Q4

Source: Google

Insider Take:

Disney is betting big on entertainment, particularly in the direct-to-consumer streaming subscription world. In addition to its stake in Netflix-rival Hulu, Disney has seen success with its ESPN+ streaming subscription service, attracting more than 1 million subscribers in its first six months. By pulling Disney content from rival services and infusing its new service, Disney+, with exclusive programming, Disney could see similar success once its service launches in late 2019.

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