Walt Disney Co. 3rd Quarter Earnings Report Shows Revenue Gains, Lower Income


Star Wars Galaxy's Edge 055

This afternoon, The Walt Disney Company released their earnings report for the 3rd fiscal quarter of 2019 (ending June 30, 2019), showing revenue up 33% and income down 5% over last year.

Chairman and CEO Bob Iger called it one of the most “complicated” earnings reports he’s seen due to the recent acquisitions and upcoming roll outs of new products.

Bob Iger said in a written statement,

Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation. I’d like to congratulate The Walt Disney Studios for reaching $8 billion at the global box office so far this year–a new industry record–thanks to the stellar performance of our Marvel, Pixar and Disney films. The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings.

During the earnings conference call, Iger also announced a direct-to-consumer bundle that will include Disney+, ESPN+, and Hulu for $12.99 total. The new product will be available at the November 12th launch of Disney+.



This earnings report is the third under a strategic reorganization plan that took place last year. Previous divisions Parks and Resorts is now Parks, Experiences and Consumer Products. The remaining portion of the Consumer Products & Interactive Media division is now Direct-to-Consumer and International. Media Networks and Studio Entertainment remain.

This also reflects the second report since the acquisition of 21st Century Fox assets.

Overall Earnings

Diluted earnings per share were down 59% from last year’s 3rd quarter, from $1.95 to $0.79. Revenues for the company were up compared to last last year, from $15.229 billion to $20.245 billion; operating income decreased slightly from $4.189 billion to $3.961 billion, a 5% drop.

Christine McCarthy, Chief Financial Officer, commented that the detrimental effect that the 21st Century Fox acquisition had on the earnings per share amounted to 60 cents per share, which was higher than the estimated 35 cents per share.



  • Parks, Experiences, and Consumer Products: 7% growth in revenues and 4% growth in operating income for the 3rd quarter
  • Direct-to-Consumer and International: 366% growth in revenues and 229% decrease in operating income for the 3rd quarter
  • Media Networks: 21% growth in revenues and 7% increase in operating income for the 3rd quarter
  • Studio Entertainment: 33% growth in revenues and 13% increase in operating income for the 3rd quarter
  • 21st Century Fox: This is the second quarter numbers have been reported, so there is no comparison to last year

Parks, Experiences, and Consumer Products

Compared to last year’s 3Q, Parks, Experiences, and Consumer Products saw growth of 7% in revenues, from $6.136 billion to $6.575 billion, and 4% growth in segment operating income, from $1.655 billion to $1.719 billion.

Growth was due to increases in consumer products and at Disneyland Paris, offset by decreases at domestic parks. Earnings benefit from the time of the Easter holiday, which fell entirely in the third quarter this year.

Consumer products growth was spurred by sales of Toy Story merchandise, but saw a decrease in sales of Star Wars merchandise.

The increase at Disneyland Paris was due to higher average ticket prices.



Domestic parks saw higher costs and lower attendance, but higher per guest spending.

Direct-to-Consumer and International

The Direct-to-Consumer and International division saw revenue growth of 366% for this quarter over last year, from $827 million to $3.858 billion. Operating income loss increased 229%, from a loss of $168 million to a loss of $553 million.

The continued losses are due to the consolidation of Hulu, investment in ESPN+, and the upcoming launch of Disney+.

The division benefited some from the new 21st Century Fox international channels, but was offset by losses at Star India due to canceled cricket matches.



Media Networks

The Media Networks division brought in $6.713 billion in revenues this quarter compared to $5.534 billion, a gain of 21% over 2018’s third quarter. Segment operating income for the division’s Q3 rose 7% over last year — $2.136 billion up from $1.995 billion.

Both cable and broadcasting saw increased revenue, however operating income was down on the broadcast side.

The increased operating income for the cable side was due to the consolidation of 21st Century Fox networks, including FX and National Geographic. Increases were also seen at ESPN.

Lower income on the broadcast side was due to a decrease in ad revenue based on changes in programming.



Studio Entertainment

Studio Entertainment was up significantly compared to last year. Quarterly revenues increased 33% from last year, from $2.880 billion to $3.836 billion — operating income jumped 13%, from $701 million to $792 million.

The 3rd quarter theatrical results compared the success of Avengers: Endgame, Captain Marvel, Toy Story 4, and Aladdin to last year’s Avengers: Infinity War, Incredibles 2, Black Panther, and Solo: A Star Wars Story. The Disney/Marvel gains were offset by the losses from Dark Phoenix.

In home entertainment, Thor: Ragnarok and Star Wars: The Last Jedi performed well last year, but there were no comparable titles in Q3 this year.

Announcements and Quotes



  • When asked about the Studios, Iger called them the envy of the industry, adding that studios heads Alan Horn and Alan Bergen will now work to transfer those strategies to 21st Century Fox. Iger said that a full impact on Fox films in production won’t be seen for a year or two.
  • Iger commented on the lower attendance at Disneyland saying that there were a number of factors in play: due to concerns over crowding, people stayed away; anticipating higher crowds, local hotels raised their rates keeping guests away; Disney raised their ticket prices; and Star Wars: Galaxy’s Edge opened with one attraction, instead of two. Iger said that long tern, then have no concerns. McCarthy added that, while attendance was down, PAID attendance was up.
  • Regarding pricing Iger said that the current domestic theme park pricing model was designed to: reflect the value and popularity of the product; reflect the investments in the resorts; and protect the guest experience. Iger says that Disney has done a good job managing crowds, adding, “we do not feel we have a pricing issue at our domestic parks.”
  • The first wave of advertising for Disney+ will begin in late August, with D23 members having the first chance to sign up. Ads will be directed at D23 members, annual passholders, etc.
  • Iger called Disney+ the most important product that has been launched during his tenure.

Source: The Walt Disney Company


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