Disney Q2 Earnings Recap

Posted on by

Disney just finished up their coverage of their second quarter earnings and announced a few updates as well, including one that shocked disney fans.

di

Here is what we learned from the meeting.

  • Disney Stock missed expectations, making $1.36 per share vs the expected $1.40 per share.
  • Revenues were 12.97 Billion compared to the expected 13.19 billion.
  • International Parks suffered this quarter.
  • Cable network revenue decreased by 2%, Parks and Resorts income increase by 10%.
  • Foreign currency impacted the Parks and resorts and consumer products since the dollar was strong.
  • First time in 5 years that Disney missed earnings expectations.
  • Domestic parks break records continuously while Shanghai Disney pre opening expenses and hong kong disneyland’s lower attendance offset part of the strong domestic performance.
  • Disney almost doubled the amount invested in domestic parks compared to last year
  • Consumer products and Interactive media was down 8% due to foreign revenues and low performer disney store and disney infinity sales.
  • SHOCKING NEWS: DISNEY INFINITY IS ENDING FOR GOOD
  • Revenue is up at Disney parks but attendance is flat. Increased results were due to high guest spending. Disneyland saw little growth due to offset by walt disney world.
  • Operating income at studios up 27% due to Zootopia and Star Wars: the force awakens
  • Zootopia #1 grossing film of all time in china and 2nd worldwide behind frozen.
  • Occupancy at Disney resort hotels down 1% but spending up 5%.
  • Disney cruise line did well this half of the year.
  • ESPN ad revenue was down 13% Year on Year.
  • Lack of growth in toys to life market with high development costs created challenging business model.
  • Leap day also affected Disney earnings
  • Disney Infinity ending, they wish to focus on license console only games; will result in 300 layoffs.
  • Disney passed $3 billion in global box office, faster than any other studio.
  • Jungle Book is the highest grossing film in India
  • Disney holds 5 out of 6 of the highest grossing weekends on record.
  • Iger specified that they will make a turn with Shanghai Disney’s grand opening and specifically called out POTC as a park highlight.

Q&A Section

Q: Could Iger’s contract be extended with Tom Staggs stepping down?
A: There are 2 years left on his contract which leaves plenty of time to find his replacement. he has no planes to extend his contract again.

  • Disney can’t comment on subscription numbers to Sling or Sony Vue but Iger says after services were added to ESPN they saw increased subscriptions.
  • Iger says company wishes to expand Hong Kong and Tokyo Disney.
  • He pointed out that not all franchises will lead to consumer products like Zootopia and The force awakens.

Q: Shanghai and how the park will further promote disney films in china?
A: Iger says there is no push back for shanghai so far. ZOOTOPIA CHARACTERS WILL COME TO CHINA SOONER THAN ANTICIPATED. 

  • Iger is pleased with performance of DisneyLife in UK. Says there is more to be had in Subscription and Affiliate revenue than Ad revenue.

Q: Sling and if Disney will join multi stream product?
A: They are still in discussions regarding this.

Q: What Disney has learned about the game console business opposed to licensing?
A: Iger says part of the issue with Infinity was having to hold inventory of the figures.

Q: ABC and what he hopes to see from it?
A: He likes for ABC to think outside of the box. He feels good about the prospects this year for ABC.

Overall Takeaway from the Conference:

  1. Studios is firing off all cylinders and doing very well
  2. Company is highly optimistic about Shanghai Disney
  3. Disney Infinity is Done.

Are you shocked that Disney did so poorly with Parks and Media Revenue?

Share your thoughts in the comments!

RECOMMENDED STORIES