Disney Parks, studio divisions carry Disney earnings again

The Disney Parks and Studio divisions again helped keep the second quarter fiscal earnings strong for the Walt Disney Company.

Diluted earnings per share for the quarter increased 30 percent to $1.95 from $1.50 in the prior-year quarter.

“Driven by strong results in our parks and resorts and studio businesses, our Q2 performance reflects our continued ability to drive significant shareholder value,” Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company, said in a news release.

“Our ability to create extraordinary content like “Black Panther” and “Avengers: Infinity War” and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth,” he said.

Here’s the breakdown of revenue by segment:

Media Networks:  $6.13 billion (up 3 percent)

Parks and Resorts: $4.88 billion (up 13 percent)

Studio Entertainment: $2.45 billion (up 21 percent)

Consumer Products and Interactive Media:  $1.08 billion (up 2 percent).

Now, look at the breakdown of operating income (which is another way of saying operating profit)by segment:

Media Networks: $2.08 billion (down 6 percent)

Parks and Resorts: $954 million (up 27 percent)

Studio Entertainment: $847 million (up 29 percent)

Consumer Products and Interactive Media: $354 million (down 4 percent).

Parks and Resorts revenues for the quarter increased 13 percent to $4.9 billion as operating income increased 27 percent to nearly $1 billion.

Higher operating income due to increased guest spending, attendance growth at Walt Disney World Resort and higher sponsorship revenue are some of the reasons for the strong Parks and Resorts showing. Guest spending growth was due to increases in average ticket prices, average daily hotel room rates and food, beverage and merchandise spending. The increase in costs was primarily due to labor and other cost inflation, an increase in depreciation associated with new attractions and higher technology spending.

The increase at international parks and resorts was due to growth at Disneyland Paris and higher occupied room nights and attendance at Hong Kong Disneyland Resort. These increases were partially offset by a decrease at Shanghai Disney Resort driven by lower attendance, cost inflation and an unfavorable foreign currency impact. Higher operating income at Disneyland Paris was due to increases in guest spending and attendance, partially offset by cost inflation. Guest spending growth at Disneyland Paris was due to higher average ticket prices driven by less discounting, and increases in average daily hotel room rates and food, beverage and merchandise spending.

Operating income growth for Studio Entertainment was due to increases in theatrical, home entertainment and TV/SVOD distribution results, partially offset by higher film cost impairments.

The increase in theatrical distribution results was due to the success of “Black Panther” in the current quarter with no comparable Marvel title in the prior-year quarter. This increase was partially offset by the performance of “A Wrinkle in Time” in the current quarter compared to “Beauty and the Beast” in the prior-year quarter.