The Walt Disney Company's Fourth Quarter Results: A Shining Entertainment Segment
2024-11-18
On Thursday, the Walt Disney Company reported its fiscal fourth quarter results that exceeded expectations. Its entertainment segment truly shone, with box office success and streaming business growth and profitability. Bob Iger is leading Disney back on track.
Disney's Fourth Quarter Triumph: Entertainment in Full Bloom
Entertainment Segment: A Box Office and Streaming Success Story
For the September quarter, Disney's revenue grew by 6% to .57 billion, surpassing the consensus estimate of .45 billion. Net income increased to 0 million, or 25 cents per share, from 4 million. Adjusted earnings per share reached .14, also beating the estimate of .10. Operating income grew by 23% to .66 billion.The entertainment segment, which encompasses traditional TV networks, direct-to-consumer streaming, and films, grew by 14% year-on-year to .83 billion. "Inside Out 2" outperformed "Frozen II" and became the highest-grossing animated movie ever. Additionally, "Deadpool & Wolverine" surpassed "Joker" from Warner Bros. Discovery and became the highest-grossing R-rated film. Together, these two films added 6 million in profit during the quarter, and the entertainment segment reported an overall profit of .1 billion. Executives also revealed that Disney became the first film studio to reach billion globally this year.
Streaming Business: From Loss to Profit
Five years after Disney+ launched, it is now profitable. The combined streaming business, including Disney+, Hulu, and ESPN+, reported operating income of 1 million, a significant improvement from last year's comparable quarter when it reported a loss of 7 million. Like its streaming peers, Disney+ Core subscribers grew by 4% to 122.7 million, and Hulu subscribers alone increased by 2% to 52 million. However, the average revenue per user for domestic Disney+ customers dropped as more than half of U.S. subscribers chose the cheaper, ad-supported tier. This is good news for Disney's advertising growth prospects. Overall, streaming entertainment ad revenue increased by 14%, while the sports segment, primarily made up of ESPN, reported flat revenue.
Experiences Segment: A Mixed Picture
The experiences segment, which includes theme parks and consumer products, saw revenue grow by 1% to .24 billion due to a slowdown, especially in the U.S. after the post-pandemic surge in visitors. The lull is expected to continue in the following quarters. Comcast also reported lower attendance at its Universal theme parks. Due to fewer visitors, Comcast's NBCUniversal theme parks revenue dropped by 5.3% to about .3 billion. On the other hand, Comcast was boosted by the Summer Olympics, which increased its NBCUniversal revenue, and Peacock's subscriber count. Peacock, with exclusive streaming rights, gained 3 million subscribers, and paid subscribers grew by 29% year-on-year to 36 million. With revenue growing by 82% to .5 billion, Comcast narrowed Peacock's losses.
