The Walt Disney Company reported their earnings today for the first quarter (Q1) of 2016 which ended on January 2, 2016. According to Bob Iger, The Walt Disney Company highest quarterly earrings in company history was “driven by the phenomenal success of Star Wars.” The global success of Star Wars: The Force Awakens drove quarterly operating income at the Studio Entertainment up 86% and Consumer Products & Interactive Media up 23%. Iger went on to say Disney is very pleased with the results which “validate our strategic focus and investments in brands and franchisees to drive long-term growth across the entire company.”
The Walt Disney Company reported record quarterly earnings of $2.9 billion for its first fiscal quarter compared to $2.2 billion for the prior-year quarter. Diluted earnings per share (EPS) for the quarter increased 36% to $1.73 from $1.27 in the prior-year quarter. Excluding certain items affecting comparability, EPS for the quarter increased 28% to $1.63.
The Parks and Resorts segment (which includes Disney Cruise Line) saw revenue increase for the quarter 9% to $4.3 billion with income up 22% to $981 million. The income growth was primary driven by domestic operations and partially offset by a decrease at international operations. Parks and Resorts benefited from the New Year’s holiday which last year fell into the second quarter.
Higher income domestically was due to guest spending and attendance growth, partially offset by higher costs. The increase in guest spending was due to higher average ticket prices at our theme parks and cruise line, increased food, beverage and merchandise spending and higher average hotel room rates. Cost increases were due to labor and other cost inflation, new guest offerings, higher depreciation associated with new attractions at Walt Disney World Resort and expenses incurred for the dry-dock of the Disney Dream in the current quarter.
Lower operating income at our international operations was due to higher operating costs and lower attendance at Disneyland Paris as well as higher pre-opening expenses at Shanghai Disney Resort. Results at Disneyland Paris were impacted by the closure of the park for four days in November 2015.
During the earnings conference call, Tom Staggs mentioned that this is the best Q1 ever for Disney Cruise Line. It is not all that often DCL gets a mention. With the increase in fares and continued trimming of the fat it is not a surprise. Later in the conference call, it was noted that DCL’s record Q1 was driven my increased fares and increase onboard guest spending. It can only make one wonder if they have been focused on building a pile of cash to build new ships or is that just a foolish wish or something to believe in. Alternatively, they could be paying for recent dry docks on the Disney Magic and Disney Dream and the upcoming dry dock for the Disney Fantasy and the expected major refit of the Disney Wonder.
For more information and an overall report click over to the Q1-2016 Earnings Report.