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Disney (DIS) surpassed expectations on the top and bottom lines in fiscal first-quarter 2019 results, sending shares higher in extended trading.
Disney reported quarterly adjusted earnings of $1.84 per share on revenue of $15.3 billion, exceeding consensus estimates of $1.54 per share on revenue of $15.15 billion, according to Bloomberg estimates.
In the year-ago quarter, Disney reported adjusted earnings of $1.89 per share and revenue of $15.35 billion. However, the year-over-year decline had widely been expected given last year’s timing of major, revenue-driving studio releases.
Studio Entertainment revenue came in at $1.8 billion for the reported quarter, ahead of estimates of $1.75 billion, according to Bloomberg data. This represented a decline over last year, when revenue in this segment was $2.5 billion. The decrease, however, had been anticipated given the year-ago quarter’s exceptionally strong studio lineup, which included the release of “Star Wars: The Last Jedi,” “Thor: Ragnarok” and “Coco.”
In the Media Networks unit, which includes Disney’s cable and broadcast divisions and ESPN, revenues totaled $5.9 billion, exceeding consensus estimates of $5.83 billion and growing 7% year-over-year.
Revenue from Disney’s Parks, Experiences and Consumer Products unit also came in ahead of expectations, with sales of $6.8 billion growing about 4.6% year-over-year. During a call with investors Tuesday, Disney management said strength in this segment was driven by guest expenditures at domestic theme parks, with per-capita spending up 7% on higher admissions, food and beverage and merchandise spend.
In Disney’s newly introduced Direct-to-Consumer & International segment, revenue fell 1% to $918 million for the quarter. The unit, which includes the media giant’s soon-to-be-launched Disney+ video streaming platform, was the only segment to post an operating loss, which totaled $136 million for the quarter.
“We look forward to the transformative year ahead, including the successful completion of our 21st Century Fox acquisition and the launch of our Disney+ streaming service,” Robert Iger, chairman and CEO of Disney, said in a statement. “Building a robust direct-to-consumer business is our top priority, and we continue to invest in exceptional content and innovative technology to drive our success in this space.”
Shares of Disney rose 1.9% to $114.70 each as of 4:10 p.m. ET.
Disney+
Investors headed into Disney’s latest quarterly results seeking further clarity on the company’s streaming strategy. Disney executives announced during a conference call with investors in November that its video streaming service, Disney+, would launch in late 2019, bringing with it a host of new content including a Star Wars prequel series and Marvel series. Disney also said it would strip its content from Netflix (NFLX), a competitor to Disney+ along with the likes of Amazon Prime Video and HBO.