Disney Delivers Record Quarterly Profit On Star Wars Success
Thanks to a galaxy far, far away, Disney’s profits have never been higher.
On Tuesday, Walt Disney DIS -4.55% posted record-breaking profits in its fiscal first quarter, powered by the blockbuster release of Star Wars: The Force Awakens and helping offset challenges with ESPN.
“Driven by the phenomenal success of Star Wars, we delivered the highest quarterly earnings in the history of our company,” said CEO Robert Iger in prepared remarks.
Net income in the quarter rose 32% to $2.88 billion, or $1.73 per share. Excluding items, earnings came in at $1.63 per share, far ahead of analyst estimates of $1.45 per share.
Revenue soared 14% to $15.24 billion, also well above analyst estimates of $14.75 billion.
Star Wars has been a roaring success for Disney, just as the Frozen effect thaws. At the box office alone, the movie has raked in $2 billion, making it only the third movie in history to cross that number.
Ticket sales helped Disney’s studio entertainment division post an 86% rise in profit during the quarter. More people also streamed old Star Wars movies at home, the company said, which helped pushhome entertainment revenues higher.
Disney’s consumer products and interactive media division saw a 23% rise in profit, helped by higher licensing revenues for Star Wars merchandise and games.
In addition to the benefit from Star Wars, investors were also watching closely for how ESPN fared during the quarter. Disney said that weakness at ESPN contributed to a 5% drop in the cable network’s profit, citing higher ESPN programming costs.
Disney has faced falling ESPN subscriber numbers as more people cut the cord and watch sports online. On an earnings call with investors, CEO Iger acknowledged ESPN has received “a lot of attention recently.” He offered some positive news, saying ”in the last couple of months, we’ve actually seen an uptick in ESPN subs, which has been encouraging.” No numbers were provided.
Disney’s parks and resorts business saw a 22% rise in profits, helped by more expensive theme park tickets, cruises and hotel rooms and increased consumer spending. Strength in the U.S. helped offset weakness abroad. In addition to higher costs at its international parks and resorts, attendance fell during the quarter at Disneyland Paris, which was closed for four days in November following the terror attacks.
Shares of Disney fell 5% to $87.23 in after-hours trading. They are down 11% over the last 12 months, lagging the broader market.