Disney held an earnings call for investors today and the results have caused shares to fall more than 6%. An article in Variety says this is the first time in two years that the company has failed to meet expectations for revenue and earnings.
Analysts were expecting revenue to hit $13.2 billion, but it fell short at $12.9 billion.
After the report was released, stock dropped from $106 per share to under $100. They did go back up, but were still down 5% from the morning.
Revenue was down to $3.9 billion, a difference of about 2%.
In the broadcasting division, operating income was down 8% to $278 million, said to be due to “lower operating income from program sales and higher programming and marketing costs, partially offset by advertising and affiliate revenue growth.”
The studio division saw the most growth, with revenue up 22% to over $2 billion, due to the success of recently released films, such as Star Wars: The Force Awakens and Zootopia.
Of the theme parks division, the report said, “Attendance at our domestic theme parks was relatively flat, as an increase at Disneyland Resort was offset by a modest decrease at Walt Disney World Resort.” There were cost increases for labor and new attractions, but due to higher per-guest spending, theme park revenue was up 4% to $3.9 billion. Operating income was up 10% to $624 million.
Disney also surprised the public with the news that they were shutting down the Disney Infinity video game franchise this summer.
Bob Iger, Disney chairman and CEO, said, “We’re very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS. Our studio’s unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value.”
News source: Variety and Orlando Sentinel
