Star-Wars-FA
Consumer Products

Q1 2017 shows Disney can’t keep up with itself

Last year’s phenomenon Star Wars: The Force Awakens looms large as Disney’s Q1 2017 revenue fell by 3% to US$14.78 billion.
February 8, 2017

Despite nabbing US$4.55 billion in revenue across its Parks and Resorts segment, Disney’s first quarter of fiscal 2017 fell short compared to Q1 2016, which saw record-breaking earnings of US$2.9 billion thanks to the behemoth Star Wars: The Force Awakens (pictured).

In the shadow of last year, the House of Mouse’s net income in Q1 2017 fell 14% to US$2.47 billion, while quarterly revenue decreased by 3% to US$14.78 billion.

Q1 revenues in Studio Entertainment decreased by 7% to US$2.52 billion. The drop in theatrical distribution reflected the relative performance of Q1 2017′s Rogue One: A Star Wars Story to 2016′s Star Wars: The Force Awakens. Smaller home entertainment sales contributed to lower operating income, though growth in TV/SVOD distribution partially offset those losses.

Consumer Products and Interactive Media revenue for the first quarter decreased by 23% to US$1.47 billion, and operating income in the same quarter fell 25% to US$642 million, cause by a drop-off in sales of Star Wars universe and Frozen merch from 2016.

Within Media Networks, revenues fell 2% to US$6.23 billion and operating income dropped 4% to US$1.36 billion. Revenue for Cable Networks and Broadcasting remained relatively steady compared to Q1 2016, though operating income for Cable Networks dropped 11% to US$864 million. The decrease in operating income for Cable Networks was due to higher operating costs and lower advertising revenue at ESPN.

Operating income for Broadcasting, however, rose by 28% to US$379 million, thanks to affiliate revenue growth and decreased programming cost write-downs for network programming.

Parks and Resorts sales also saw a rise of 6% and a 13% increase in operating income (US$1.11 billion). Operating income growth was due in large part to increases at domestic and international operations, with guest spending boosting domestic growth and the opening of Shanghai Disney Resort resulting in an increase internationally.

In Q4 2016, Disney’s quarterly revenue missed analysts’ projections, dropping 3% to US$3.14 billion. Despite the Q4 decline, Disney’s fiscal 2016 revenue was up 6% to hit a record US$55.6 billion.

About The Author
Elizabeth Foster is Kidscreen's Senior Writer. Contact Elizabeth at efoster@brunico.com

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