Walt Disney Co Q2 2018 Earnings Results

The Walt Disney Company stock closed for the day at $101.79 a share before reporting their earnings for the second quarter (Q2) of fiscal year 2018 which ended on March 31, 2018.

“Driven by strong results in our parks and resorts and studio businesses, our Q2 performance reflects our continued ability to drive significant shareholder value,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth.”

Diluted earnings per share (EPS) for the quarter increased 30% to $1.95 from $1.50 in the prior-year quarter. Excluding certain items affecting comparability, EPS for the quarter increased 23% to $1.84 from $1.50 in the prior-year quarter. EPS for the six months ended March 31, 2018 increased to $4.86 from $3.05 in the prior-year period. Excluding certain items affecting comparability, EPS for the six months increased 22% to $3.73 from $3.05 in the prior-year period.

The Parks and Resorts segment (which includes Disney Cruise Line) saw revenues for the quarter increase 13% to $4.9 billion and segment operating income increase 27% to $1.0 billion.

Operating income growth for the quarter was due to increases at the domestic and international parks and resorts. Results included a benefit from a shift in the timing of the Easter holiday relative to our fiscal periods. The current quarter included one week of the Easter holiday, whereas the entire Easter holiday fell in the third quarter of the prior year.

Higher operating income at the domestic parks and resorts were primarily due to increased guest spending, attendance growth at Walt Disney World Resort and higher sponsorship revenue, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices, average daily hotel room rates and food, beverage and merchandise spending. The increase in costs was primarily due to labor and other cost inflation, an increase in depreciation associated with new attractions and higher technology spending.

The increase at the international parks and resorts was due to growth at Disneyland Paris and higher occupied room nights and attendance at Hong Kong Disneyland Resort. These increases were partially offset by a decrease at Shanghai Disney Resort driven by lower attendance, cost inflation and an unfavorable foreign currency impact. Higher operating income at Disneyland Paris was due to increases in guest spending and attendance, partially offset by cost inflation. Guest spending growth at Disneyland Paris was due to higher average ticket prices driven by less discounting, and increases in average daily hotel room rates and food, beverage and merchandise spending.

During the Q1 earnings call, Disney acknowledged the 14-day dry dock of the Disney Magic would adversely affect Disney Cruise Line’s operating income by about $20 million. This was not mentioned in the earnings report, but was touch on during the earnings call by Senior Executive Vice President and Chief Financial Officer, Christine McCarthy while discussing the Parks & Resorts segment.

For more information and an overall report click over to the Q2-2018 Earnings Report.

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