Is Disney’s Q1 Really That Underwhelming?

The Walt Disney Co. (NYSE: DIS) released fiscal first-quarter financial results after markets closed Tuesday. The Mouse House said that it had $1.53 in earnings per share (EPS) and $20.85 billion in revenue, compared with consensus estimates that called for $1.44 in EPS and $20.79 billion in revenue. The same period from last year had $1.84 in EPS and $15.30 billion in revenue.

Media Networks revenues for the quarter increased 24% to $7.4 billion, and segment operating income increased 23% to $1.6 billion. This comprised of Cable Networks and Broadcasting which had revenues of $4.8 billion and $2.6 billion, respectively.

Parks, Experiences and Products revenues for the quarter increased 8% to $7.4 billion, and segment operating income increased 9% to $2.3 billion. Operating income growth for the quarter was due to increases at merchandise licensing and domestic parks and resorts, partially offset by lower results at our international parks and resorts.

Studio Entertainment revenues for the quarter increased from $1.8 billion to $3.8 billion and segment operating income increased from $309 million to $948 million. Higher operating income was due to increases in theatrical and TV/SVOD distribution results at our legacy operations, partially offset by a loss from the consolidation of the TFCF businesses.

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Direct-to-Consumer & International revenues for the quarter increased from $0.9 billion to $4.0 billion and segment operating loss increased from $136 million to $693 million.

Disney reported that it had 26.5 million subscribers for its Disney+ streaming service. ESPN+ had a total of 6.6 million subscribers and Hulu subscribers totaled 30.4 million.

Bob Iger, chairman and CEO, commented:

We had a strong first quarter, highlighted by the launch of Disney+, which has exceeded even our greatest expectations. Thanks to our incredible collection of brands, outstanding content from our creative engines and state-of-the-art technology, we believe our direct-to-consumer services, including Disney+, ESPN+ and Hulu, position us well for continued growth in today’s dynamic media environment.

Shares of Disney closed Tuesday at $144.73, with a 52-week range of $107.32 to $153.41. The consensus analyst price target is $157.76. Following the announcement, the stock was up 1% at $146.50 in the after-hours session.

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