Disney shares set for positive start as parks performance catches eye
Results beat expectations, though investors have an eye on costs
Shares in The Walt Disney Company were indicated to open 1% higher on Monday after the group posted first-quarter results that beat expectations on revenue and earnings per share.
Adjusted earnings came in at $1.63 per share, above forecasts of $1.56, while revenue rose 5% year on year to $26 billion, exceeding consensus estimates of $25.7 billion, according to Bloomberg.
Total operating income fell to $4.6 billion from $5.1 billion a year earlier, with the company citing higher costs across its business segments.
Disney’s experiences division, which includes theme parks and cruise lines, posted record quarterly revenue of $10 billion. Domestic park attendance rose 1%, with average guest spending up 4%.
The company said it expects reduced international travel to its US parks to act as a headwind in the current quarter.
The results were released shortly after a report suggested that Josh D’Amaro, who heads Disney’s parks and experiences unit, is under consideration as the group’s next chief executive.
Shares initially rose by about 3% following the release but reversed course ahead of market open.
Disney’s sports segment reported a 23% drop in operating income, driven by higher rights costs for National Basketball Association and college sports content, as well as a $110 million impact from a carriage dispute with YouTube TV. Revenue for the unit rose 1% to $4.91 billion.
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Turnover in the entertainment segment, which includes film and streaming, grew 7% to $11.6 billion, led by box office success for Zootopia 2 and Avatar: Fire and Ash. Segment profits declined 35% to $1.1 billion due to increased production and marketing costs.
The company said streaming revenue, included within the entertainment segment, grew 11% to $5.3 billion.
