This week The Walt Disney Company reported its third quarter earnings for the fiscal year with parks and resorts and media networks showing increases in revenue.
The company’s net income increased 1 percent up to $1.85 billion, and revenue increased 4 percent to $11.58 billion which was still lower than Wall Street’s expectation of $11.7 billion.
“We are pleased with the results we delivered in the third quarter,” said Disney CEO and Chairman Robert A. Iger. “We are confident that our strategy of creating high-quality branded content positions us well for the future.”
The third quarter earnings report show that the company’s two biggest performing segments continue to be media networks – specifically ESPN – and parks and resorts. The media networks revenues increased 5 percent to $5.4 billion and operating income increased 8 percent to $2.3 billion.
The parks and resorts segment increased revenue 7 percent to $3.7 billion and the operating income increased 9 percent to $689 million. Disney’s theme parks continue to perform strongly, with attendance at Walt Disney World Resort and Disneyland Resort up 3 percent, setting a new attendance record during the third quarter.
The report does note that there was an unfavorable impact due to the shift in timing of the Easter holiday for the third quarter. But it also notes that higher operating income at the domestic parks and resorts was due to increased guest spending and higher attendance at the parks and was partially offset by higher costs.
The guest spending increased due to higher ticket prices and food and beverage spending, while higher costs were driven by new guest offerings including My Magic+, Disney’s Art of Animation Resort, and the expansion of Fanstyland at the Magic Kingdom, and labor and cost inflation.
Meanwhile the studio and entertainment segments didn’t have a great third quarter, with revenue falling 2 percent to $1.6 billion. While the dismal performance of The Lone Ranger won’t be seen until the fourth quarter, Iron Man 3 and Disney/Pixar’s Monsters University appeared to be the two bright spots for this segment.