Disney Beats Earnings Expectations After Strong Showing From Film Studio
The conglomerate also posted a record financial performance for the fiscal year
After strong results from the film studio, The Walt Disney Co. narrowly beat the expectations of analysts on Thursday by posting $12.38 billion in revenue and 89 cents per share in earnings in its fiscal fourth quarter.
The conglomerate was expected to earn 88 cents a share on revenue of $12.37 billion.
Disney also said that the fiscal year marked the fourth in a row of record financial performance.
Revenue for the quarter rose 7 percent while net income was up 8 percent to $1.5 billion.
The studio entertainment segment led all others in terms of growth in operating income, more than doubling to $254 million due to home entertainment sales of Frozen as well as the theatrical success of Guardians of the Galaxy and Maleficent.
Operating income for Disney's largest segment, media networks, was flat at $1.44 billion. On the cable side, programming costs at ESPN and the international Disney Channels were a drag on the bottom line while the domestic Disney Channels delivered a boost.
The company's parks and resorts segment showed a 20 percent improvement to $687 million in operating income, consumer products was up 9 percent to $379 million and interactive rose 13 percent to $18 million.
Disney has been on a tear of late, with the stock up nearly 90 percent over the past two years and analysts enthusiastic about the Marvel film slate through 2019 a well as multiple Star Wars projects.
On Thursday, Disney shares rose 1 percent to $92, though the shares were slipping 2 percent after the closing bell when investors saw the earnings report.
On a conference call Thursday with analysts to discuss earnings, CEO Bob Iger disclosed that the film Toy Story 4 is in the works to be directed by John Lasseter and released in June, 2017.
Iger also said the company is looking forward to growing the consumer products segment over the next five years, stressing that Star Wars and Marvel characters aren't the only driving forces. Disney Jr., for example, shouldn't be overlooked as Doc McStuffins and other properties are selling well.
"There's a wealth of intellectual property to mine," he said. He also said even in Europe, where the economy is weak, Disney consumer products shipments for Christmas are "comping up significantly."
Addressing a soft TV advertising market, which has been a theme this earnings season for media companies, Iger was cautiously optimistic.
"Some money has siphoned out of traditional media and into digital platforms," he acknowledged. "That said, there's still huge value in the 30-second spot."
Iger also raved about the scenes he has seen from the upcoming Star Wars: Episode VII --The Force Awakens and he reminisced that there weren't many lining up to direct the film before the studio chose J.J. Abrams. "That's a tall order. That's a lot of pressure," he said.