The Walt Disney Company saw a major dip of 51% in net income in its third quarter. Despite revenues up 33% at US$20.25 billion compared to $15.23 billion, year over year, the company’s net income sat at $1.44 billion compared to $2.92 billion in Q3 last year.
The quarter, which ended June 29, was the first full quarter since Disney’s acquisition of Twenty-First Century Fox in March and Hulu in May, and the results come ahead of Disney’s launch of its own SVOD platform Disney+, set for November. During a call with investors, chairman and CEO Bob Iger confirmed the company’s plan to offer an SVOD bundle of its services, combining Disney+, Hulu and sports streamer ESPN+ for $12.99 per month. Disney+ alone will be set at $6.99.
Disney, in its earnings report, attributed its Q3 results — including the jump in revenue and dip in net income — to the ongoing consolidation of Twenty-First Century Fox and Hulu.
The bulk of the jump in revenue was attributed to blockbuster hits like Avengers: Endgame, Captain Marvel and Toy Story 4, though gains were made almost across the board.
Media networks saw a 21% increase in revenue at $6.71 billion, with cable networks, including National Geographic, and broadcasting seeing jumps of 24% ($4.46 billion) and 16% ($2.25 billion), respectively.
Studio entertainment revenue hit $3.8 billion, up 33% year over year.
Meanwhile, direct-to-consumer and international revenue increased astronomically at $3.9 billion, compared to $8.27 million last year. The jump was largely attributed to new revenue streams associated with Hulu and ESPN+.
Diluted earnings per share (EPS) from continuing operations for the quarter decreased 59% to $0.79 from $1.95 compared to the same quarter last year.
“Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation,” said Iger in a statement. “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.”
(Photo courtesy of the Walt Disney Company)