The Walt Disney Company reported quarterly earnings for its third fiscal quarter ended June 30. Disney has seen profits boost 23 percent in its most recent quarterly reports to a net income of USD 2.9 billion but has missed Wall Street estimates for USD1.95 a share.
Consumer products and interactive media revenues decreased 8 percent to USD 1.0 billion and segments operating income decreased 10 percent to USD 324 million. The decrease in operating income was due to lower income from licensing activities from products based on Spider-Man and Cars, and decreased comparable retail store sales, partially offset by lower costs at the games business.
Film studio revenues have increased 20 percent mainly because of the Avengers: Infinity War, which has taken USD 2 billion in ticket sales globally, making it the highest-grossing film of the year.
Parks and Resorts revenues for the quarter increased 6 percent to USD 5.2 billion and segment operating income increased 15 percent to USD1.3 billion. The increased operating income at the international parks and resorts was due to growth at Shanghai Disney Resort and Hong Kong Disneyland Resort.
Broadcasting revenues for the quarter increased 11 percent to USD 2.0 billion and operating income increased 43 percent to USD 361 million owing to higher program sales, affiliate revenue growth and increased network advertising revenue.
Media Networks revenues for the quarter increased 5 percent to USD 6.2 billion and segment operating income was comparable to the prior-year quarter at USD 1.8 billion.
However, despite its record summer at the box office, Disney has failed to beat forecasts owing to a heavy spend on its upcoming streaming service, one that will put the studio in direct competition with Netflix and Amazon.
This is the first earnings report since Disney won a high-stakes battle with Comcast to buy 21 Century Fox’s entertainment assets.
Disney and Fox shareholders and the US Department of Justice have already approved the USD 71billion proposed the merger. Disney is awaiting regulatory approval in several countries including China.
Disney CEO Bob Iger said that the launch of its streaming service will come later this year and is the ‘biggest priority of the company.’
Disney’s upcoming streaming service won’t try to compete directly with Netflix and Amazon, but will focus instead on quality namely original programs from Disney’s “Star Wars,” Pixar and Marvel brands, Iger said.
Disney is building the streaming service as more people switch from traditional cable TV bundles to streaming online through services such as Amazon and Netflix.