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The decrease at the studio was as a result of tough comparisons, as in the same quarter last year, Disney had ‘Star Wars: The Last Jedi’ and ‘Thor: Ragnarok.’ on its platform.
Walt Disney revealed on Tuesday that it recorded $15.3 billion in revenue in its most recent quarter and earned $1.84 per share after certain items, beating the expectations of analysts on both the top and bottom lines, news that sent its shares 2 percent higher after the closing bell.
Analysts were expecting Disney to earn $1.54 in its first fiscal quarter of 2019 on $15.16 billion in revenue. Disney grew its sales in two of its sectors, media networks and parks, experiences and consumer products, but sales shrunk 27 percent at studio entertainment and 1 percent at direct-to-consumer and international.
The decrease at the studio was due to tough comparisons, as in the same quarter last year, Disney had Star Wars: The Last Jedi and Thor: Ragnarok.
Sales of consumer products suffered from a decrease in products based on Star Wars and Cars, the company said.
For the entire conglomerate, revenue shrunk less than 1 percent from the year-ago quarter while net income was down 37 percent to $2.79 billion, though the declines were expected. Net income also suffered by comparison due to a $1.6 billion benefit recorded last year due to tax reform.
Disney is expecting to close its $71 billion partial acquisition of 21st Century Fox by the end of June and launch its Disney+ streaming service toward the end of the year, and CEO Bob Iger on Tuesday addressed both when he spoke to analysts during a conference call.
The exec said the Fox film studio would be largely left alone to create the content it is known for, including the R-rated Deadpool movies, as they won’t be branded with the family-friendly “Disney” name. “There might be room for more of that,” Iger said when speaking of adult-oriented movies, including those from Marvel.
He also said that Disney will not need to spend much to market Star Wars: Galaxy’s Edge, the theme park attraction coming to California and Florida, even joking, “Maybe I should just tweet: ‘It’s opening,’ and that would be enough.”
“That’s a signal I just sent to our parks and resorts people to keep that budget really low.”
Disney disclosed last month that its ownership of streaming technology firm BAMtech, coupled with its 30 percent stake in Hulu — set to widen to 60 percent after the Fox deal closes — led to a loss of more than $1 billion in the 2018 fiscal year.
Iger said Tuesday that Disney plans to leverage FX, the cable channel it will get from Fox, on Hulu but not on Disney+, and he said the latter will be heavily tilted toward content created by the various parts of the Disney conglomerate — though he is not averse to licensing from outsiders.
Iger further said the ultimate goal is to allow consumers to easily purchase a bundle of three streamers: Disney+, Hulu and ESPN+.
The company’s media networks section saw a 7 percent rise in revenue to $5.9 billion and 7 percent gain in operating income to $1.3 billion, though the cable networks unit of that segment saw declining operating income due in part to rising costs at ESPN, even as ad and affiliate revenue at the sports network grew.
Disney also said that ESPN experienced a decline in subscribers, as it has over the past few years, though it was not specific.
Source: Hollywood Report