Disney Earnings Strong Despite Smaller Studio Profits

Bob Iger - Getty - H 2019

The studio segment posted $2.1 billion in revenue during the quarter, down 15 percent.

Walt Disney on Wednesday reported quarterly earnings and revenue that beat the expectations of analysts even as its studio didn't measure up to what it posted a year earlier.

Disney was expected to earn $1.58 billion on revenue of $14.4 billion in its second fiscal quarter, but it posted $1.61 billion — excluding certain items — on revenue of $14.9 billion.

Captain Marvel took in $1.1 billion globally since opening March 8, though last year at this time it had Black Panther, which earned $1.3 billion. It also had Star Wars: The Last Jedi a year ago and no Star Wars film this time around.

The studio segment posted $2.1 billion in revenue during the quarter, down 15 percent from the same frame last year, and it was the only of Disney's four segments to show a decline. The studio's operating income sunk 39 percent to $534 million.

Disney rejiggered its film-release schedule on Tuesday, delaying the Avatar sequel — acquired when it purchased the Fox studio — until December 2021. It said it will debut new Star Wars movies beginning in December 2022.

While Disney busted records with Avengers: Endgame, the film's financial performance won't show up on the company's top or bottom lines for several months.

Disney stock was on a tear in April after unveiling details of its Disney+ streaming service, but it hasn't done much to reflect the success of Endgame yet. Disney+ should roll out in November, and a Star Wars expansion at Disneyland is expected to open May 31. A similar Star Wars expansion should open in Florida by the end of August. 

Endgame will begin streaming on Disney+ on Dec. 11, CEO Bob Iger announced on Wednesday.

Disney shares closed 2 percent higher on Wednesday and were up 1 percent after the closing bell.

Revenue for Disney's most profitable segment, media networks, was flat at $5.53 billion, with ESPN making up for lost subscribers with higher fees. The segment's operating income was down 3 percent to $2.2 billion.

Its parks segment posted $6.2 billion in revenue, up 5 percent, and $1.5 billion in operating income, up 15 percent.

Its newest segment, direct-to-consumer and international, reported $955 million in revenue, up 15 percent, and a loss of $393 million.

Disney had its 21st Century Fox assets for less than two weeks during the quarter, and they garnered $373 million in revenue and $25 million in operating income.

Iger refused to disclose the next three Marvel movies, but said there are "a lot of clues" in Endgame. He said he'll let Marvel supply the details this summer. When it comes to "guarding their secrets," Iger said, "I'm just a Marvel guy."

Iger said Disney has bought back rights to some content so it can go on Disney+ sooner and that negotiations for more are forthcoming.

Iger reiterated he's "bullish" on Hulu, though he noted that its expansion requires cooperation from Comcast, which owns about a third of the streaming asset. "We can't do it on our own," he said.