Parks & Movies Boost Disney, While the Media Segment Struggles

The Walt Disney Company (NYSE: DIS) reported earnings (PDF link) after the market closed on Tuesday, May 8th, and the “House of Mouse” posted solid results, driven primarily by blockbuster movies and attendance at its amusement parks:

  • Net revenue of $14.5 billion, up from $13.3 billion (9% increase year-over-year)
  • Net income of $2.94 billion, up from $2.39 billion (23% increase YOY)
  • Earnings of $1.95 per share, up from $1.50 per share (30% increase YOY)

If you’ll recall from a few weeks ago, Disney was one of two investments that I was keeping a close eye on. I was concerned about the subscription base of the company, with carriage fees from cable companies providing a steady stream of revenue for the entertainment behemoth. However, in recent years, Disney has been losing subscribers as more and more people “cut the cord” and access their entertainment through non-cable providers like Hulu or Netflix. The draw of live sports just hasn’t been enough to keep people subscribed to cable, especially when most major sporting events are televised on stations that can be viewed by using an antenna if so desired. Continue reading