Why Disney’s Revenue Rose in Fiscal 1Q18



Disney’s fiscal 1Q18 revenue

The Walt Disney Company (DIS) posted revenue of $15.4 billion in fiscal 1Q18. Its top line rose 4% year-over-year (or YoY) compared to $14.8 billion in fiscal 1Q17, but it fell behind analysts’ consensus estimate of $15.5 billion.

While the Parks and Resorts segment’s revenue improved 13%, the Studio Entertainment and Consumer Products and Interactive Media segments’ revenues fell YoY in fiscal 1Q18. Media Networks, on the other hand, posted a marginal rise in revenue.

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Revenues lagging estimates in fiscal 1Q18

As we can see in the chart above, Disney has been lagging behind its consensus estimates in the past few quarters. However, its total revenue rose on a YoY basis in fiscal 1Q18 driven by double-digit growth in the Parks and Resorts segment.

While the company’s Parks and Resorts segment’s revenue rose in the quarter due to rising demand for theme parks, revenue in the Media Networks segment remained flat as a fall in broadcasting revenue was offset by a rise in the Cable Networks segment. In fiscal 1Q18, the company’s Studio Entertainment segment reported a 1% YoY fall in revenue due to falling home entertainment results. However, the release of hit movies such as Marvel’s Thor: Ragnarok, Star Wars: The Last Jedi, and Coco in fiscal 1Q18 added revenue in the quarter.

The Consumer Products and Interactive Media segment’s revenue fell 2% in fiscal 1Q18 due to a fall in merchandise licensing revenues and the soft retail business. The company, however, witnessed growth in the games business.

Rivals’ revenues

In 4Q17, cable and media company Comcast (CMCSA) saw revenue growth of 4.2% YoY to $21.9 billion and exceeded the consensus estimate of $21.8 billion. CBS (CBS) saw a revenue rise of 11% YoY to $3.9 billion in 4Q17. CBS exceeded Wall Street’s expectations of $3.7 billion.

Time Warner (TWX), which is currently in a merger deal with AT&T (T), also exceeded Wall Street’s revenue expectations in 4Q17. TWX posted revenue of $8.6 billion in 4Q17, beating its previous year’s results by 9% and Wall Street’s expectations of $8.4 billion.


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