Wall Street analysts had been forecasting $14.7bn in revenue and earnings per share of $1.45, but the company reported $15.2bn in revenue and profits of $1.63 per share.
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“Star Wars: The Force Awakens”, which has taken in more than $2 billion worldwide since its release in mid-December, allowed Walt Disney Studios to deliver operating income of $1.01 billion in the quarter, an 86 percent increase over the prior year.
Disney’s results were “driven by the phenomenal success of ‘Star Wars, ‘” Chairman and Chief Executive Robert Iger said.
Disney’s quarterly net income rose to a record $2.88bn, or $1.73 per share, from $2.18bn, or $1.27 per share, a year earlier.
There have been hints for the last week that Disney’s bet on Star Wars: The Force Awakens would pay off big time when they reported their first quarterly earnings of the year.
All four Disney segments boosted revenue, with studio and entertainment’s 46 percent increase leading the pack. Higher operating income was due to an increase in theatrical distribution results, a higher revenue share with the Consumer Products & Interactive Media segment, growth in TV/SVoD distribution and increased home entertainment results. Its cable networks include ESPN, Disney Channels, and ABC Family, as well as UTV/Bindass and Hungama.
The dropoff came despite what Iger said were positive signs of a rebound in subscription rates for the sports network.
Disney shares fell 2.7% to $89.75 in after-hours trading.
Disney’s operating income from cable networks fell 5% to $1.2 billion, as ESPN continued to lose subscribers.
Large portion of the healthy earnings report is credited to “Star Wars: The Force Awakens” which proved to be a blockbuster. Earnings per share rose 28 per cent from the previous year, while sales climbed 14 per cent.
The culprit for subscriber losses in general, of course, are the twin phenomena of cord-cutting and skinny bundles, the former referring to consumers who have ditched cable television all together, preferring streaming services such as Netflix (NASDAQ:NFLX), and the latter meaning folks who downsized to a few dozen channels to save money on their cable bills.
Mr. Iger further added: “We’re very pleased with our results, which continue to validate our strategic focus and investments in brands and franchises to drive long-term growth across the entire company”.
Disney stock last traded at $92.41, up 0.31% as of Tuesday, February 9.
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Higher programming costs at ESPN, unfavorable currency translation, and a decline in total subscribers in the Disney media networks universe offset and increase advertising and affiliate fees.
