Disney beats on earnings, misses on revenue
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Disney beats on earnings, misses on revenue

The Walt Disney Company reported second quarter earnings for 2017 on Tuesday, demonstrating a solid business weathering the oft-talked about storm of cord-cutting. Disney reported a revenue increase of 3% from the year-ago quarter to $13.34 billion, against analysts’ expectations of $13.44 billion. Meanwhile, net income increased by 11% over the same period, resulting in diluted earnings per share of $1.50 – a beat of the consensus estimates of $1.41.

ESPN represents a big chunk of Disney’s business, and it’s one that analysts are worried about: with the rise of cord-cutting, as streaming video on demand (SVOD) providers move into the world of premium content creation, subscription TV services are under threat. However, Disney’s second quarter earnings demonstrated that the business isn’t failing yet. Its Media Networks (which includes ESPN) saw revenue increase by 3% against the previous year, even as operating income fell by 3%. Amongst the reasons for this drop in income are higher programming costs at ESPN.

If Disney’s Media Networks segment is closely watched for signs of weakness, its remaining three businesses – parks and resorts, studios, and merchandising – are consistently strong. This was reiterated in the last quarter, and Disney’s overall revenue rose by 3% from the second quarter of 2016, while its operating income was up 5% in the same time frame.

On the company’s earnings call, Disney’s CEO Bob Iger talked the quarter up, saying:

“We're extremely pleased with our results in Q2, and our continued strong performance both creatively and financially reflects what a profoundly productive and exciting era this is for the Walt Disney Company. And that's a direct result of our long-term strategic focus on creating the most compelling branded content, fully leveraging innovative technology and expanding our global presence.”


Dominion holds The Walt Disney Company in its Global Trends Luxury Fund.

If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.