Consumer Products

Disney posts record-setting year, US$52.5 billion in revenue

The House of Mouse may be in line for some upscale renovations following a record-setting fiscal in which Disney reported a 7% increase in revenues to US$52.5 billion and 12% growth in net income to US$8.4 billion.
November 6, 2015

The House of Mouse may be in line for some upscale renovations following a record-setting fiscal year, in which the Walt Disney Company reported a 7% increase in revenues to US$52.5 billion and 12% growth in net income to US$8.4 billion.

Disney’s Q4 earnings per share ¬†at US$1.20 were up 35% from $0.89 from last year, besting analysts’ predictions of US$1.14 per share, while fourth quarter revenues of US$13.512 billion fell just shy of predictions. However, for the fiscal year, earnings per share climbed by 15% to reach US$4.90.

In terms of revenue and operating income for both Q4 and the fiscal year, Disney’s numbers increased by double digits in many of the company’s main business segments—Media Network, Parks and Resorts, Studio Entertainment, Consumer Products—however, the Interactive division did suffer a setback in its Q4 and yearly revenue.

Breaking down the numbers by specific business segments a bit further, in Media Networks (cable networks and broadcasting) revenue for Q4 was up by 12% to US$5.8 billion, and operating income rose 27% to US$1.8 billion. And for the fiscal year, revenue increased by 10% to US$23. 2 billion, while operating income gained 6% to US$7.79 billion.

Within Media Networks, revenue for cable networks increased by 12% to US$4.2 billion for the quarter and 10% for the fiscal year to US$16.58 billion, while operating revenue increased by 30% to US$1.65 billion for the quarter and 5% to US$6.78 for the year. As for broadcasting, revenue increased by 10% to US$1.58 billion for the quarter and 11% for the year to US$6.68 billion, while operating income remained flat at US$164 million for the quarter and increased 18% to US$1 billion for the year.

For fiscal 2015, operating income growth in Disney’s Media Networks division was driven by higher affiliate fees, increased advertising revenue at ESPN and the ABC Television Network, as well as higher operating income from program sales. However, gains were partially offset by an increase in programming and production costs at ESPN, and to a lesser extent, the Disney Channels and the ABC Television Network.

Heading over to Parks and Resorts, Q4 revenues were up 10% to US$4.4 billion for the quarter and 7% to US$16.1 billion for the fiscal year, while operating income increased 7% to US$738 million in Q4 and 14% to US$3 billion in 2015.

Growth in this area came largely from Disney’s domestic operations as a result of higher average guest spending, attendance and occupancy, which was partially offset by increased inflation and volume costs. Disney’s international parks and resorts did not fare as well, due to lower attendance and occupancy at Hong Kong Disneyland Resort and higher pre-opening expenses at Shanghai Disney Resort.

The Studio Entertainment side of the business was relatively flat in both the quarter and fiscal year at US$1.78 billion and US$7.36 billion, respectively. However, operating income declined by 100% in Q4 to US$254 million while gaining 27% for the year to US1.97 billion.

Operating income growth came from a higher revenue share with its consumer products segment, thanks to the continued success of Frozen merchandise, as well as increases in TV distribution revenue and higher numbers at the box office domestically. Growth was partially offset by declines in home entertainment units sold compared to the success of Frozen in the previous year.

Speaking of Frozen, along with Avengers and Star Wars Classic merchandise, it was a key driver for Disney’s Consumer Products division, which saw revenues increase by 11% to US$1.19 billion for the quarter and 13% to US$4.5 billion for the year. Operating income for consumer products also increased by double digits for the quarter and the year, climbing 10% to US$416 and 29% to US$1.75 billion, respectively.

Turning lastly to the Interactive segment, revenue declined by 4% to US$347 million in Q4 and by 10% to US$1.17 billion for the year, while operating income spiked 72% to US$31 million for the quarter and 14% to US$132 for the first fiscal year.

For Q4, the increase in operating income came from higher sales of Disney Infinity and lower mobile business costs, which was partially offset by lower revenues at Disney’s mobile business. Higher sales of Disney Infinity were the result of the timing of the release of Disney Infinity 3.0, which launched on August 30, 2015 compared to Disney Infinity 2.0, which launched September 23, 2014.

And looking at fiscal 2015 for Disney’s Interactive division, growth was driven by the ongoing success of the Tsum Tsum mobile game and lower product development and marketing costs, primarily at its mobile businesses, which was partially offset by lower operating income from Disney Infinity console games.

Despite Disney’s remarkable year, with the highly anticipated Star Wars: The Force Awakens movie due out on December 18 and ticket pre-sales already setting a record with US$6.5 million Stateside, not to mention the associated consumer products program is expected to hit US$1 billion at US retail, one can only imagine what kinds of numbers Disney will be reporting this time next year.




About The Author
Patrick Callan is a senior writer at Kidscreen. He reports on the licensing and consumer products side of the global children's entertainment industry via daily news coverage and in-depth features. Contact Patrick at pcallan@brunico.com.


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