Although Walt Disney posted profitability earlier
than expected in its second-quarter period at some of its high profile direct-to-consumer (D2C) entertainment business, there were mixed results elsewhere.
Advertising revenue
at its linear TV networks was down 6%, while D2C businesses grew 8% year-over-year.
Company-wide advertising revenues were up 7%. According to Brian Wieser, writing in
his Madison & Wall Substack publication, this was “well ahead of what we have seen so far from other TV-centric media companies.”
He adds that
“backing out some outperformance internationally and political advertising, underlying domestic ad revenues were likely up closer to 5% year-over-year led by sports, including additional high
profile games on ESPN.”
Overall revenue trends (subscription and advertising) for linear TV networks and D2C business continue the mixed negative and
positive results -- with the former down 8% (to $2.8 billion) and the latter up 13% (to $5.6 million).
ESPN posted a 4% domestic business gain to $3.9
billion, with operating income down 9% to $780 million.
At the same time, D2C’s entertainment businesses posted a small net gain of $40 million (versus a net loss
of $587 million in the year-ago period).
But Disney is not out of the woods yet. It expects a “softer” third-quarter marketplace for its streaming
entertainment business.
Other positive news showed domestic subscribers at Disney+ -- Disney's main D2C business -- grew 17% to 54.0 million.
Total
international subscribers (sans Disney+ Hotstar) were down 2% to 63.6 million.
Adding in sports streaming in the current quarter -- ESPN+ -- put all of Disney’s D2C
business still at a net loss of $18 million. This narrows the losses of $659 million a year ago.
Licensing and sales of programming content sank 4% to $1.4 billion. This
is due to no major film titles that were in theaters versus that of a year ago when “Ant-Man and the Wasp: Quantumania” was released.
Combining
both linear, D2C, and content sales/licensing resulted in a 5% lower total to $9.8 billion. Disney’s Parks & Experiences revenues was 7% higher to $6.0 billion with operating income growing
6% to $1.6 billion.
Total companywide revenues slipped 1% to $22.1 billion in its second-quarter period, slightly below expectations.
All
this news pulled down Disney stock in a big way in early Tuesday morning -- down 10% to $106.