Disney Beats Analysts’ Estimates on Earnings Front, But Could Not Repeat Its Own Stellar Performance of Same Quarter Last Year

Disney Beats Analysts’ Estimates on Earnings Front, But Could Not Repeat Its Own Stellar Performance of Same Quarter Last Year

Riding on the robust performance of its parks and resorts, Disney posted the numbers for Q1 of 2017 beating the analysts’ expectations. The EPS (Earnings per share) figure of $1.55 was better than what analysts had given, but the revenue figure of $14.78 billion fell short of the Wall Street estimated figure. Wall Street was expecting $1.49 EPS on $15.26 billion revenue.

Though Disney managed to beat the analysts on some front, it could not keep up with its own success that it achieved last year. Its results of this first quarter show a 10% decline in profit per share and 3% y-o-y (year on year) decline in revenue.

Bob Iger, the CEO of Disney said, “I am very pleased with our financial performance in the first quarter. Our Parks and Resorts delivered excellent results and, coming off a record year, our Studio had three global hits including our first billion-dollar film of fiscal 2017, Rogue One: A Star Wars Story. With our proven strategy and unparalleled collection of brands and franchises, we are extremely confident in our ability to continue to drive significant value over the long term.”

If we analyse the segment-wise revenue of this entertainment conglomerate, it has faltered on many fronts. The company’s interactive media and consumer products missed the Wall Street’s expectations by posting $1.48 billion in revenue against the expected figure of $1.75 billion.

At its sports network, the ad sales dropped. In its ESPN-led Cable Networks unit, while the revenues fell 2% to reach $4.4 billion, the operating income was down by a whopping 11% to reach just $864 million figure. The company defended this decline by saying that it was due to higher programming costs and they succeeded in offsetting it by affiliate revenue growth at least partially if not fully.

It was Disney’s parks and resorts segment that stood out and posted the operating income that toppled the analyst estimates. A part of this success in this division can be attributed to Shanghai Disney Resort that was opened to public last summer. The analysts were assuming that the company will come up with $1.04 billion operating income and $4.59 billion in revenue, whereas the actual figures released by the company were $4.56 billion and $1.11 billion in revenue and operating income respectively.

The long-time CEO of the company has just two more years to go before retirement, but so far there is no update on the front of the successor. Although, Iger has hinted that he is ready to extend his term if the need arises.

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