Investors probably will be more interested in what CEO Bob Iger has to say about prospects for ESPN and Star Wars than in Disney’s results for its fiscal Q4. But the numbers at least haven’t exacerbated the cord cutting fears the company raised in August.
Disney generated $1.61 billion in net income, up 7.3% vs the period last year, on revenues of $13.51 billion, up 9.1%. The top line was a little shy of analyst expectations for $13.55 billion. But earnings at $1.20 were well ahead of the $1.14 that the Street anticipated.
“In Fiscal 2015 we delivered the highest revenue, net income and adjusted EPS in the Company’s history, reflecting the power of our great brands and franchises, the quality of our creative content, and our relentless innovation to maximize value from emerging technologies,” Iger says.
Numbers are slightly skewed by the inclusion of a 53rd week for the fiscal year.
Cable networks including ESPN more than held their own with revenues up 12% to $4.25 billion and operating income up 30% to $1.66 billion. Disney says that overall subscriptions were up with the inclusion of SEC Network for a full quarter, although that was “partially offset by a decline in subscribers at certain of our networks.” Ad sales increased as the company packed in additional spots while ratings fell.
The Broadcasting unit, which houses ABC, saw a 10% increase in revenues to $1.58 billion although operating income was up just 0.6% to $164 million. Ad sales increased with the extra week and higher rates. But profits were weighed down by higher programming costs. Disney syndicated How To Get Away With Murder to Netflix, but had decreases for My Wife And Kids and America’s Funniest Home Videos. It also reported an equity loss tied to higher content and marketing costs at Hulu, which it co-owns with Comcast and Fox.
The Studio Entertainment operation delivered a revenue increase of 0.3% to $1.78 billion with operating income of $530 million, up 109%. Theatrical sales were off as the slate with Inside Out and Ant-Man competed with last year’s Guardians Of The Galaxy, Maleficent, Planes: Fire And Rescue and The Hundred-Foot Journey. And home video was down as Marvel’s Avengers: Age Of Ultron and Cinderella faced off against last year’s international sales of Frozen and Marvel’s Captain America: The Winter Soldier.
Parks and Resorts turned in a respectable report with revenues up 10% to $4.36 billion and operating income of $738 million, up 7%. Spending and attendance increased at domestic parks. But international fell with lower attendance and room nights at Hong Kong Disneyland Resort, higher operating costs at Disneyland Paris, and pre-opening expenses at Shanghai Disney Resort.
Consumer Products also had an up quarter with merchandise from Star Wars Classic, Avengers, and Frozen. Revenues were up 11% to $1.20 billion with operating income up 10% to $416 million.