If you didn’t get a chance to tune into yesterday afternoon’s earrings call for the second quarter for The Walt Disney Company, well here’s a general rundown of what happened during the call from Chairman & CEO, Bob Iger of the company.
This year’s earrings call for the second quarter certainly beat expectations but, most of the concerns and talk was about the television sports channel of ESPN. We’ll get towards that later and here’s some of the main topics of the earrings call conversation that did very well for The Walt Disney Company.
Disney Parks and Resorts for the quarter increased 9% to $4.3 billion and segment operating income increased 20% to $750 million. The opening of the Shanghai Disneyland Resort last year in June for the responsibility for this growth income in the third quarter of the prior year and an increase at Disney’s domestic parks and resorts. Chairman Iger did say in the earrings call in a few short days in which they will welcome their 10th million visitor towards the Shanghai Disneyland Resort of how huge and rapid growth attendance has been for the park.
Walt Disney Studios Entertainment revenue decreased 1% to $2.0 billion and segment operating income increased 21% to $656 million. The driven growth was due to TV/SVOD distribution, lower film cost impairments and an increase in home entertainment results. Partially offset lower revenue share from the Consumer & Interactive Media for this increase.
Home entertainment results were higher due to average net effective pricing for higher sales of new releases and Blu-ray titles including Moana, Doctor Strange compared towards The Good Dinosaur in the prior-year quarter. The increase was partially offset by lower unit sales of classic Star Wars titles.
Theatrical distribution results were comparable to the prior-year quarter. The current quarter benefited from lower pre-release marketing costs and the strong performance of Beauty and the Beast. However, these benefits were offset by the performance of Star Wars: The Force Awakens and Zootopia in the prior-year quarter compared to Rogue One: A Star Wars Story and Moana in the current quarter. Zootopia was released in the second quarter of the prior year, whereas Moana was released in the first quarter of the current year.
Consumer Products & Interactive Media segment was a decrease in revenue was due towards the stronger performance of merchandise based on Star Wars and Frozen in the prior-year quarter. Revenue for the quarter decreased 11% to $1.1 billion and segment operating income increased 3% to $367 million. This was a improvement due towards their games business, driven by favorable impact of discontinuation of Disney Infinity console game business in the prior-year quarter. Largely offset by lower licensing results and decline for retail business.
Now one of Disney’s biggest on going battles is within the position of the ESPN television network that has gained media attention about this topic. Disney’s cable business that falls under media and networks in which they reported operating income of $1.79 billion below the Wall Street expectation for about $1.85 billion. 3% of a year-over-year decrease in operating income was primarily because of ESPN’s higher programming costs.
Chairman Iger defended the sports network and believes that the company is “confident” with ESPN’s future and which also increase of advertising and subscriber fees for the network. This was also because of the factor of Disney’s contract with the NBA and costs that are related towards college football games. ESPN laid off 100 employees last month because that ESPN managers were being aggressive about controlling costs in which on- air commentators and journalists lost their jobs.
Disney has quite amount of projects in the works ranging from the expansion of the Tokyo Disneyland Fantasyland from the Oriental Land Company, two new Disney Cruise Lines ships, two Star Wars themed expansions opening up some point in 2019 in Anaheim and Orlando, two Toy Story themed expansions opening up at the Shanghai Disneyland Resort and Disney’s Hollywood Studios at the Walt Disney World Resort. Also the major $1.5 billion dollar overhaul of the Hong Kong Disneyland Resort with a complete makeover of the castle and not to confuse it with the original Sleeping Beauty castle at the Disneyland Resort in Anaheim, California.
This past March of this year in which Chairman Iger renewed his contract through the company till July 2nd, 2019 due towards the factor of his heir successor, Tom Staggs stepped down from the company until hopefully they find a new candidate to replace Chairman Iger.
Iger was also asked if he wanted to run for the Oval Office and said “not spending much time on what I’m doing next” after he leaves The Walt Disney Company since rumors and speculations were being reported.
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Sources: The Walt Disney Company, CNBC