Walt Disney Company Q3 revenues up 4% at $22.3 bn

The Walt Disney Company has reported its third quarter earnings, posting revenues of $22.3 billion – a 4% growth from the previous year.

“Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “In the eight months since my return, these important changes are creating a more cost effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters. While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises.” 

Linear Networks revenues for the quarter decreased 7% to $6.7 billion, while operating income decreased 23% to $1.9 billion.

Domestic Channels revenues for the quarter decreased 4% to $5.5 billion, and operating income decreased 14% to $1.8 billion. The decrease in operating income was due to lower results at both Broadcasting and Cable.

The decrease at Broadcasting was due to lower results at ABC and the owned television stations, both of which reflected lower advertising revenue. To a lesser extent, the decrease at ABC also reflected higher marketing costs. The decrease in advertising revenue at ABC was attributable to lower average viewership, while the decrease at the owned television stations was due to lower rates.

Lower operating income at Cable was due to higher sports programming and production costs and lower affiliate revenue, partially offset by a modest increase in advertising revenue. Higher sports programming and production costs reflected contractual rate increases for NBA programming and new motor sports programming. Lower affiliate revenue resulted from a decline in subscribers, partially offset by higher contractual rates. The increase in advertising revenue reflected higher impressions and rates at ESPN, largely offset by lower impressions at the non-sports channels.

International Channels revenues for the quarter decreased 20% to $1.2 billion, and operating results decreased to a loss of $87 million from income of $166 million. The decrease in operating results was primarily due to lower advertising revenue and, to a lesser extent, an unfavorable foreign exchange impact. The decrease in advertising revenue was due to lower rates attributable to Indian Premier League (IPL) cricket programming.

Direct-to-Consumer revenues for the quarter increased 9% to $5.5 billion and operating loss decreased to $0.5 billion from a loss of $1.1 billion. The decrease in operating loss was due to a lower loss at Disney+, higher operating income at Hulu and a lower loss at ESPN+.

The improvement at Disney+ was due to higher subscription revenue and a decrease in marketing costs, partially offset by higher programming and production costs and lower advertising revenue. Higher subscription revenue was attributable to Disney+ Core subscriber growth and increases in Disney+ Core retail pricing. The increase in programming and production costs was due to higher costs for non-sports content, partially offset by a decrease in sports programming costs. The decreases in sports programming costs and advertising revenue reflected the comparison to IPL cricket programming in the prior-year quarter, as the company did not renew the digital rights beginning with the 2023 season. Higher costs for non-sports content were due to more content provided on the service.