Disney Smashes Wall Street’s Q1 Estimates, Paced By Media Networks And Parks

Disney smashed Wall Street estimates with results for its fiscal first quarter, with diluted earnings per share hitting $1.86, a full 31 cents above expectations.

Total revenue of $15.3 billion trumped consensus estimates of $15.18 billion.

Media Networks and Parks and Resorts set the pace with solid single-digit revenue gains.

The studio film slate turned in a so-so quarter, especially compared with no Star Wars- or Marvel-sized title in the mix. Mary Poppins Returns has collected $329M worldwide to date and Ralph Breaks the Internet has racked up $487 million. Revenue in the studio unit fell 27% to $1.8 billion.

The recently minted Direct-to-Consumer & International segment saw a 1% dip in revenue to $918 million revenues but an operating loss that widened from $42 million to $136 million. The company blamed the revenue slowdown on foreign currency impact, but acknowledged that the larger losses stemmed from the investment ramp-up in ESPN+ (which the company said now has 2 million subscribers), as well as the cost of launching Disney+. Offsetting these factors in part was an increase at international channels and a lower equity loss on Disney’s Hulu stake.

The earnings report could be the last full quarter of results before Disney closes its acquisition of most of 21st Century Fox, which will report its quarterly earnings tomorrow morning. The companies have said they expect the $71.3 billion transaction to close during the first half of the year. Regulators in Brazil are the main holdouts at this point, with recent press reports out of the region suggesting a verdict could still take a few more weeks to arrive.

If recent quarters are any indication, Disney is apt to sprinkle some news about its streaming slate into the first half of its conference call with analysts. Disney+, the highly anticipated subscription streaming offering, is slated to launch before the end of the year.

In the earnings press release, CEO Bob Iger called the ramp-up of Disney+ “our top priority, and we continue to invest in exceptional content and innovative technology to drive our success in this space.”

Disney shares closed the regular trading session at $112.61 a share, up a bit less than 1%. They moved higher after hours on the results.