Movies

Disney studio earnings soar with ‘Moana 2.’ Hurricanes hit theme park profits

BBG News

In the initial quarter of their fiscal year, the success of “Moana 2” at the box office significantly boosted Disney’s overall performance, despite the fact that their dependable theme park division faced challenges due to two consecutive hurricanes in Florida.

For the three-month period ending December 28th, the media and entertainment behemoth based in Burbank reported a revenue of approximately $24.7 billion, marking a 5% rise compared to the preceding quarter. The earnings before taxes amounted to $3.7 billion, representing a 27% growth over the same period last year. The earnings per share for this quarter increased to $1.40 from $1.04 in the previous quarter.

In a recent statement, Disney’s CEO, Bob Iger, indicated that the company’s performance this quarter clearly showcases Disney’s artistic and financial robustness, as we have been moving forward with the strategic plans established over the last two years. Essentially, this quarter has set a solid foundation for our fiscal year, and we are optimistic about our strategy for ongoing growth.

In this quarter, Disney’s entertainment sector – encompassing their studios along with Disney+ and Hulu streaming services – experienced significant growth, generating approximately $10.9 billion in earnings. This figure represents a 9% rise compared to the same timeframe last year.

As a movie enthusiast, I’m thrilled to report that the surge in operating income for our beloved cinematic sector is largely attributed to the sensational success of “Moana 2.” This enchanting sequel, featuring the captivating voices of Auli’i Cravalho and Dwayne Johnson, has undeniably lived up to its predecessor’s legacy from 2016. The box office magic it weaved is a testament to the enduring appeal of well-crafted stories and exceptional talent.

In 2022, the earnings from content sales and licensing – encompassing cinema distribution of films, as well as television and film content sales and licenses – surged by 34%, reaching a total of $2.2 billion. This is in comparison to $1.6 billion earned in the preceding year. The corresponding period in 2023 saw the release of “Wish”, an animated movie, and “The Marvels”, a superhero film that underperformed at the box office.

Hollywood Inc.

To reflect Disney’s evolving approach to streaming, they shifted ‘Moana 2’ from a series format to a full-length movie for theaters. This decision seems to have been profitable, as it has done well in ticket sales.

The company also saw continued gains in its streaming business.

Disneys entertainment streaming services, such as Disney+ and Hulu, generated $6.1 billion in revenue last year, representing a 9% boost over the previous year. These platforms amassed a total of approximately 178 million subscribers during the first quarter, marking a slight increase of around 0.9 million compared to the same timeframe last year. Interestingly, Disney+-exclusive subscriptions saw a minor dip of 1% to 124.6 million, which can be attributed to a price hike that quarter, leading to some customers canceling their subscriptions.

However, Disney’s entertainment sector didn’t receive entirely positive updates. Their linear networks faced ongoing challenges, with revenues amounting to $2.6 billion – a 7% drop compared to the corresponding quarter of the previous year. Similarly, their operating income dipped by 11%, reaching $1.1 billion. The declines were attributed to increased programming expenses and reduced affiliate earnings due to subscription cancellations (cord-cutting).

Disney’s division that handles its profitable theme parks, cruise lines, and unique travel experiences like Aulani resort in Hawaii, brought in approximately $9.4 billion in revenue this year, which is about a 3% increase over last year. However, for this quarter, the segment’s operating income remained nearly unchanged at around $3.1 billion. In terms of domestic operations, Disney’s parks and experiences recorded an operating income of $2 billion, representing a decrease of about 5% compared to the previous year.

Disney explained that the less-than-expected earnings, especially in its domestic theme parks and cruises, were partly due to the expenses associated with launching their latest cruise ship, the Disney Treasure, along with inflation and the impact of hurricanes Helene and Milton. Specifically, they temporarily closed Walt Disney World Resort for a day and modified a cruise itinerary because of Hurricane Milton.

The sports division of the company, encompassing ESPN, generated approximately $4.9 billion in earnings – virtually unchanged from the same period last year. Conversely, this segment saw an operating income of $247 million, contrasted with a loss of $103 million during the corresponding quarter in the previous year. Notably, domestic advertising revenue for ESPN rose by 15% compared to the preceding quarter from the same timeframe last year.

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2025-02-05 15:01

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