Disney Earns Largest Quarterly Revenue Total Ever
The Walt Disney Company has announced its earnings for the fiscal first quarter of 2020. And Disney’s win streak has continued, as the company has beaten expectations while earning more than $20 billion in revenue. Let’s talk about the business of Disney through the end of 2019.
Disney’s fiscal first quarter for 2020 ran from September 29th through December 28th in 2019. I realize that this is confusing, but let’s focus on the simple part. We’re talking about the holiday period of 2019 when we discuss these numbers. Obviously, that’s a strong timeframe for Disney.
Now, one number matters more than the rest. That’s total income during the quarter. Disney claimed a staggering $20.86 billion, the most ever during a quarter. Part of the reason why involves the timing of the Fox acquisition.
Purchasing those assets enhanced Disney’s earnings potential. During the first quarter, when Disney owned this stuff, the company grossed $20.245 billion. During the next quarter, it managed $19.1 billion. So, $20.86 billion this quarter demonstrates the strength of Disney in the wake of the Fox purchase.
Comparing this quarter to the same one from 2019 proves the point. Revenue was “only” $15.3 billion then. That’s a growth of 36.3 percent in a calendar year!
A Deeper Dive into the Numbers
As you know by now, Disney operates four core businesses. Each of them just experienced a staggeringly successful quarter. In fact, growth in two of these fields more than doubled, messing up Disney’s tidy balance sheet. Don’t worry. Every accountant dreams of typing “>100%” in the percent change field.
First, let’s talk about the businesses that you care the most about. You’re a parks fan, right? Well, the Parks, Experiences and Products division exploded this quarter. Disney grossed $7.396 billion in this division, a year-over-year improvement of eight percent.
Folks, I don’t want to blow your mind here, but that’s the worst performance of the Disney core businesses, at least in terms of annual growth. Everything else improved by at least 24 percent. That Fox acquisition was a masterstroke.
The Film Division
The other category that you care deeply about is the film division. Disney’s Studio Entertainment increased from $1.824 billion in 2019 to $3.764 billion in 2020. Again, remember that I’m actually talking about holiday movies that Disney released at the end of 2018 and 2019.
Obviously, the most recent lineup proved more lucrative. Disney struggled a bit with The Nutcracker and the Four Realms, and Mary Poppins Returns didn’t light up the box office as expected. Even Ralph Breaks the Internet only did okay relative to pre-release predictions.
For 2019, Star Wars: The Rise of Skywalker theoretically anchored Disney’s box office. It’s responsible for nearly one-quarter of the division’s fiscal earnings. Remember that anything after December 28th doesn’t count for this quarter, though.
Still, other titles like Maleficent: Mistress of Evil, Ford v Ferrari, and Frozen II more than held their own. In fact, Frozen II became the most popular animated release of all-time. So, the film’s $1.431 billion actually impacts the bottom line for the quarter even more than Star Wars IX. And that’s probably not something Disney officials expected.
The TV Division
For many years, Disney’s bread and butter came from the combo of the Parks and Media Networks divisions. The latter business covers Disney’s cable and network media empire, including channels like ABC, Freeform, and Disney Channel.
For a while now, observers have expected this segment to erode. Somehow, Disney keeps evading such issues. For the fiscal quarter, Media Networks grossed $7.361 billion, a 24 percent gain from 2019’s $5.921 billion. Again, some Fox assets come into play here, but the success this quarter speaks to the cleverness of Disney officials.
The Future King of Disney Segments
The final division is the one that has caused the most significant stir lately. Direct-to-Consumer & International (DCI) performed so poorly a year ago that I had to go under the hood to explain the why of it. For this quarter in 2019, Disney managed only $918 million in the DCI branch.
Oh, how times have changed. The DCI segment now includes Disney+, the crown jewel of the Disney empire right now. It’s the buzz topic that has caused Disney stock to reach unprecedented heights. And the financials support this notion.
Thanks to Disney+, DCI earned a staggering $3.987 billion this quarter. Friends, that’s more than quadruple what it managed during the same timeframe last year. Also, please remember that Disney+ didn’t even begin until November 12th. So, the quarter was already half-over by that point.
When you look at these numbers, you suddenly understand why Wall Street has taken such an interest in Disney+. It has fundamentally changed Disney’s digital presence. Of course, I’d be remiss if I didn’t point out that Hulu/Hulu+ Live TV also plays a factor in this growth.
Still, DCI couldn’t hit $1 billion at this time last year. Today, it’s knocking on the door of $4 billion. That statement alone supports the notion that Disney+ has reinvigorated the entire Disney brand.
As far as fiscal earnings reports go, a company would be hard-pressed to have a better one than what Disney just did.