The Walt Disney Co (DIS, Financial) released its 8-K filing on August 7, 2024, reporting earnings for its third quarter ended June 29, 2024. The company operates in three global business segments: entertainment, sports, and experiences. Entertainment includes the ABC broadcast network, several cable television networks, and the Disney+ and Hulu streaming services. The sports segment houses ESPN and the ESPN+ streaming service, while the experiences segment contains Disney's theme parks and vacation destinations.
Performance Overview
For the third quarter of fiscal 2024, The Walt Disney Co (DIS, Financial) reported revenues of $23.2 billion, a 4% increase from $22.3 billion in the prior-year quarter. Income before income taxes improved significantly to $3.1 billion from a loss of $0.1 billion in the prior-year quarter. Diluted earnings per share (EPS) was $1.43, compared to a loss of $0.25 in the prior-year quarter. Excluding certain items, diluted EPS for the quarter increased to $1.39 from $1.03 in the prior-year quarter.
Segment Highlights
The entertainment segment saw operating income nearly triple year over year, driven by improved results in Direct-to-Consumer and Content Sales/Licensing and Other. The success of "Inside Out 2," which became the highest-grossing animated film of all time, significantly contributed to this growth. The sports segment experienced a 6% decline in operating income due to lower results at Star India, despite a 4% growth in ESPN's operating income. The experiences segment reported a 2% increase in revenue but a 3% decrease in operating income, impacted by a moderation in consumer demand.
Financial Achievements
The Walt Disney Co (DIS, Financial) achieved several financial milestones in Q3 2024:
- Total segment operating income increased by 19% to $4.2 billion.
- Adjusted EPS grew by 35% to $1.39.
- Free cash flow was $1.2 billion, despite a 24% decrease from the prior-year quarter.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenues | $23.2 billion | $22.3 billion | 4% |
| Income before income taxes | $3.1 billion | $(0.1) billion | nm |
| Diluted EPS | $1.43 | $(0.25) | nm |
| Adjusted EPS | $1.39 | $1.03 | 35% |
| Free Cash Flow | $1.2 billion | $1.6 billion | (24)% |
Analysis and Commentary
The Walt Disney Co (DIS, Financial) demonstrated robust performance in its entertainment segment, particularly in Direct-to-Consumer and Content Sales/Licensing and Other. The company's ability to achieve profitability in its combined streaming businesses for the first time is a significant milestone. However, the experiences segment faced challenges due to a moderation in consumer demand, which could impact future quarters.
"Our performance in Q3 demonstrates the progress we’ve made against our four strategic priorities across our creative studios, streaming, sports, and Experiences businesses," said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. "This was a strong quarter for Disney, driven by excellent results in our Entertainment segment both at the box office and in DTC, as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance."
Overall, The Walt Disney Co (DIS, Financial) has shown resilience and strategic growth, particularly in its entertainment and streaming segments. The company's balanced portfolio and strategic initiatives position it well for continued earnings growth, despite some challenges in the experiences segment.
Explore the complete 8-K earnings release (here) from The Walt Disney Co for further details.
