Walt Disney reports 27% increase in operating income in Q1 FY24

The Walt Disney Company has reported a 27% jump in operating income from all segments – entertainment, sports and experiences – in the Q1 FY24 at $ 3,876  million compared to $3,043 million in Q1FY23.

However, the company’s overall revenue for the quarter remained nearly flat at $23, 549 million compared with $23, 512 million in the same quarter previous fiscal.

The company reported a 7% dip in its entertainment segment’s operating income from $10,675 million in Q1FY23 to $9,981 million in Q1FY24.

The revenue of its linear networks dropped by 12% from $ 3,202 million to $2,803 in this quarter.  Its domestic operating income dropped by 5% while its international operating income dropped by 12%.

The company, in its financial statements, attributed one of the causes for it to be the lower advertising revenue primarily due to  a decrease at the ABC Network attributable to fewer impressions and lower political advertising revenue   at the owned TV stations.

On the other hand, the company also noted an 86% decrease in its operating loss for the Direct-to-Consumer (DTC) segment.  The company said that one of the reasons for this was an  increase in advertising revenue due to higher impressions  across  streaming services, partially offset  by lower rates  at Hulu.

The sports segment saw a 4% rise in revenue, standing at $ 4,835 million in Q1FY24 from $4,640 in Q1FY23. Notably, its revenue from Star India was up by 71% from $233 million to $399 million. However, the company reported an increased operating loss of $ 315 million in the sports segment from Star India alone in the first quarter of FY24. The loss was $129 million in Q1 FY23.

The experiences segment saw a 7% rise in revenue to $9,132 million from $ 8,545 million with a 8% decrease in operating income.               

Commenting on the same, the company said in its statement, “ At   Experiences,    we generated   all-time records in revenue, operating income, and operating margin in the   first quarter, and we recently celebrated the well-received openings of World of Frozen at Hong Kong Disneyland Resort and Zootopia at Shanghai  Disney Resort.”

Robert A. Iger, Chief Executive Officer, The Walt Disney Company said, “Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for  our company,  focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios, and turbocharging growth in our parks and experiences.”

Talking about their expectations from the new quarter, the company stated that they expect to reach profitability at their combined streaming businesses in the fourth quarter of fiscal 2024.

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