‘Star Wars’ Lifts Disney Q1 Earnings Beyond Expectations

ESPN programming costs drag down income from cable networks

Star Wars: The Force Awakens
Disney

The Walt Disney Co. reported first quarter 2016 earnings of $1.63 per share on $15.24 billion of revenue, exceeding analyst expectations.

According to Thomson Reuters, analysts had expected the company to report $1.45 in earnings per share on 14.75 billion in earnings.

For the same quarter last year, Disney reported $1.27 on $13.39 billion. Year over year, the company was up 28 percent in earnings per share and 14 percent in revenue. The company credited the success of “Star Wars: The Force Awakens” for the earnings increase.

“Driven by the phenomenal success of ‘Star Wars,’ we delivered the highest quarterly earnings in the history of our Company, marking our 10th consecutive quarter of double-digit EPS growth,” Disney chairman and CEO Robert A. Iger, said in a statement. “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.”

Through Feb. 8, Disney’s “Star Wars: The Force Awakens” has earned 2.01 billion worldwide. Operating income for the company’s studio segment grew 10 percent in the quarter to $1.0 billion.

Disney’s cable networks, including flagship ESPN, however, continued to show troubling signs.

Though revenue for Disney’s cable networks increased 9 percent to $4.5 billion, operating income was down 5 percent to $1.2 billion. The company blamed lower equity income from A+E Networks and a decrease in operating income from ESPN. Disney specifically called out increased programming costs and for the declines at ESPN.

Comments