×
You will be redirected back to your article in seconds

Disney Earnings Get Lift From ‘Lion King,’ Theme Parks

CEO Bob Iger addresses future of 'Star Wars' film franchise.

Quarterly earnings and revenues at the Walt Disney Company got a lift thanks to the box office success of “The Lion King” and growth in the company’s theme parks business.

Excluding certain items, diluted earnings per share decreased 28% to $1.07 from $1.48 in the prior-year quarter, beating forecasts. Revenues at the media giant also topped estimates, climbing 34% to $19.1 billion, up from $14.3 billion in the year-ago period. Wall Street was looking for adjusted earnings of 96 cents per share on $19.03 billion in revenue.

The company is undergoing seismic changes. Earlier this year, Disney completed its $71.3 billion acquisition of much of 21st Century Fox’s entertainment assets. It’s a deal that gives the studio control of 20th Century Fox, Nat Geo, FX and other brands, along with the rights to such storied franchises as “Avatar,” “X-Men” and “The Simpsons.” Despite the added fire power, the integration has not been a smooth one. After Disney released disappointing earnings in August, the studio pinned much of the blame on Fox film flops such as “Dark Phoenix.” At the time, Disney CEO Bob Iger said Fox’s film performance was “well below where it had been and well below where we hoped it would be when we made the acquisition.”

Even with Fox’s struggles, the movie side of the business was a source of strength during the most recent period. Studio entertainment revenues for the quarter jumped 52% to $3.3 billion and operating income increased 79% to $1.079 million thanks to the commercial reception of blockbusters such as “Toy Story 4,” “Aladdin” and the aforementioned “The Lion King.” That offset other Fox flops that Disney inherited — a group of money losers that included “Ad Astra” and “The Art of Racing in the Rain.” In total, Fox films lost $120 million in the quarter.

The company’s theme parks arm also experienced growth, with revenues for the quarter jumping 8% to $6.7 billion, and segment operating income rising 17% to $1.4 billion. The company attributed that to growth in sales of merchandise based on “Frozen” and “Toy Story,” as well as greater spending among guests of Disneyland due in part to higher ticket prices. Not everything went smoothly. Hurricane Dorian adversely impacted attendance at the Florida-based Walt Disney World, while Hong Kong Disneyland’s popularity suffered amid political unrest in the region.

Sales improved in both parts of Disney’s television operation, but higher programming costs at ESPN and ABC, as well as lower ad sales took a bite out of profits. Cable network revenues improved 20% to $4.2 billion, even as operating income decreased $19 million to $1.3 billion. Broadcasting revenues for the quarter increased 26% to $2.3 billion, but operating income decreased $17 million to $377 million.

Thursday’s earnings report comes as the media conglomerate is preparing the launch of Disney Plus, a subscription streaming service it hopes will rival Netflix. The service will debut on Nov. 12 and will feature the “Star Wars” spinoff series “The Mandalorian” and a live-action version of “Lady and the Tramp.” Disney Plus will cost $6.99 per month, less than the $8.99 it costs to subscribe to Netflix and a fraction of the $14.99 per month that WarnerMedia plans to charge for its upcoming streaming service HBO Max. Its price is undercut by that of Apple’s streaming service, which clocks in at under $5. The landscape is a crowded one. Comcast is also launching a streaming service and Amazon continues to attract customers with its Prime Video offering. Disney, however, believes that it will be able to be a major player in that space thanks to its strong association with family-friendly entertainment. It will attempt to find older customers with Hulu, which it said will be the “official” streaming home of FX content.

“With the launch of Disney Plus we’re making a huge statement about the future of media and entertainment and our ability to thrive in this new era,” Iger said.

Disney gave some insight into that new digital video business, which it is breaking out under the direct-to-consumer and international revenues rubric. Revenues in the sector increased from $0.8 billion to $3.4 billion, while segment operating loss increased from $340 million to $740 million. The losses were attributable to operating costs surrounding Hulu — Disney owned a share of the service and bought Fox’s stake in its acquisition. The company also had to shoulder programming and marketing costs associated with the upcoming launch of Disney Plus.

Disney has made much of its ownership of major brands as it struggles to distinguish itself from other entertainment powerhouses. The company not only controls Pixar, the maker of “Toy Story” and “Inside Out.” It also owns Lucasfilm and Marvel, the creators of “Star Wars” and comic book adventures. However, there are questions about the future of those series. Marvel just wrapped up an important phase of its film series with “Avengers: Endgame,” which brings the story of fan favorites such as Captain America and Iron Man to a close. Likewise, “Star Wars” is wrapping up its nine-film Skywalker saga with the December release of “The Rise of Skywalker.” Iger stressed that there are upcoming Marvel films such as “Black Widow” and “Thor 4,” and stressed that “Star Wars” is developing three series for Disney Plus, including “The Mandalorian.” He noted that both properties inspire theme park rides, television shows and merchandising, and aren’t just valuable because of their box office results.

“When we think about those two businesses, Marvel and ‘Star Wars,’ we think about them as more than just films and film franchises,” Iger said. “We feel really good about their creative direction, but also their commercial direction.”

In the case of “Star Wars,” the company has struggled to find other avenues for film spinoffs. 2018’s “Solo” lost money and Lucasfilm has hired and parted ways with several directors, including Josh Trank, Colin Trevorrow, and Phil Lord and Chris Miller. Last month, the company announced that David Benioff and D.B. Weiss will not move forward with a planned trilogy about the origins of the Jedi. Iger said after “The Rise of Skywalker” is released, the film franchise will “go into a hiatus” for a few years.

Disney’s stock got a boost from the solid earnings report. Shares were up more than 4% at $138.50 in after-hours trading.

More Biz

  • Sean "Diddy" Combs Revolt TV

    Sean Combs Slams 'Illusion of Economic Inclusion' at Comcast Amid Byron Allen Fight

    Sean Combs has come out swinging against Comcast in a lengthy statement prompted by the cable giant’s legal battle with Entertainment Studios chief Byron Allen. Combs accused Comcast of maintaining “the illusion of economic inclusion” in its handling of a carriage agreement with Combs’ Revolt TV channel. Combs was critical of Comcast for failing to [...]

  • Bon Iver Justin Vernon Grammys

    Bon Iver, Tanya Tucker, Thom Yorke Lead Indie Labels to 44% of Grammy Nominations

    Ever since Arcade Fire’s “The Suburbs” won Album of the Year at the 2011 Grammy Awards, independent labels have seen their star rise on “Music’s Biggest Night,” and that looks set to continue at the 2020 ceremony, where Bon Iver, Radiohead’s Thom Yorke, Alabama Shakes’ Brittany Howard, Elvis Costello and others have gotten big nods. [...]

  • US Capitol

    Congress Introduces AM-FM Act to Revise Copyright Law for Terrestrial Radio

    Senator Marsha Blackburn and Rep. Jerrold Nadler today introduced the Ask Musicians for Music Act (AM-FM), which aims to revise existing copyright law for radio stations and musicians. Under the current copyright system, radio stations can use sound recordings over their airwaves without paying royalties to creators who own a stake in the sound recordings. [...]

  • Harriet Tubman Cynthia Erivo

    AMC Theatres Fires Three Employees Over Racial Profiling Incident During 'Harriet' Screening

    AMC Theatres has fired three employees in one of its Louisiana multiplexes after an incident during a screening of “Harriet.” An African American women’s group called the 504 Queens allege that 15 members were racially profiled while watching “Harriet” at AMC’s Clearview Palace 12 in Metairie on Nov. 7. A letter sent from the organization’s [...]

  • Byron Allen

    Byron Allen's Discrimination Suit Against Comcast Should Be Allowed to Move Forward

    More than anything, the Supreme Court justices seemed bemused. Comcast executives and entrepreneur Byron Allen came to the nation’s high court on Nov. 13 to duke it out over the racial discrimination case that Allen’s Entertainment Studios has pursued since 2015.  But the question put before the court was a narrow issue of legal precedent [...]

  • Christine Baranksi Karey Burke Coutney Kemp

    Christine Baranski, Karey Burke and Courtney Kemp Set for Brandon Tartikoff Awards

    Christine Baranski, “Power” creator and showrunner Courtney Kemp and ABC Entertainment chief Karey Burke are among the five recipients set for the 2020 Brandon Tartikoff Awards, to be handed out in January as part of the annual NATPE conference in Miami. Jeff Zucker, chairman of news and sports for WarnerMedia and president of CNN Worldwide, [...]

  • BMI’s Charlie Feldman Retiring After 31

    BMI’s Charlie Feldman Retiring After 31 Years With Company

    Charlie Feldman, BMI’s Vice President of Creative in New York, announced today that he will retire from the company at the end of the year. A 31-year veteran of BMI, Feldman will continue to consult for the company in the new year, according to the announcement. Mike O’Neill, President and CEO of BMI, said, “I [...]

More From Our Brands

Access exclusive content