Summary
The Walt Disney Company reported strong top-line growth for the second quarter and first half of fiscal year 2022, with total revenues increasing by 23% and 29%, respectively, driven by a significant recovery in its Parks, Experiences and Products (DPEP) segment. While DPEP revenue more than doubled year-over-year, the Media and Entertainment Distribution (DMED) segment also saw revenue growth, albeit at a slower pace. Net income attributable to Disney declined significantly in the quarter due to a large revenue reduction from an early contract termination and higher investment losses, but showed substantial growth for the six-month period. Diluted EPS from continuing operations also saw a decline for the quarter, but a strong increase for the first half of the year. Despite the strong revenue rebound, particularly in parks, the company is facing increased costs in its media and entertainment segment, especially within Direct-to-Consumer (DTC) services, leading to a wider operating loss in that division. The company also noted ongoing impacts from COVID-19 on certain international operations and production. Investors should monitor the profitability of the DTC segment and the continued recovery and growth drivers within the Parks division.
Financial Highlights
50 data points| Revenue | $21.50B |
| SG&A Expenses | $4.10B |
| Operating Expenses | $19.07B |
| Operating Income | $3.57B |
| Interest Expense | $380.00M |
| Net Income | $1.41B |
| EPS (Basic) | $0.77 |
| EPS (Diluted) | $0.77 |
| Shares Outstanding (Basic) | 1.82B |
| Shares Outstanding (Diluted) | 1.82B |
Key Highlights
- 1Total revenues increased by 23% year-over-year for the quarter to $19.2 billion, and by 29% for the six months to $41.1 billion, primarily driven by the strong recovery in the Parks, Experiences and Products (DPEP) segment.
- 2DPEP segment revenues more than doubled, increasing by over 100% year-over-year for both the quarter ($6.7 billion) and the six months ($13.9 billion), reflecting the easing of COVID-19 restrictions and increased consumer demand.
- 3Disney Media and Entertainment Distribution (DMED) segment revenue grew by 9% for the quarter to $13.6 billion and by 12% for the six months to $28.2 billion, driven by increased DTC subscription and advertising revenue.
- 4Net income attributable to Disney decreased by 48% for the quarter to $470 million ($0.26 per diluted share) compared to $901 million ($0.50 per diluted share) in the prior year, impacted by a $1 billion revenue reduction for a Content License Early Termination and investment losses.
- 5For the six months, net income attributable to Disney increased by 71% to $1.57 billion ($0.89 per diluted share) compared to $918 million ($0.52 per diluted share) in the prior year, benefiting from strong DPEP performance and an increase in DMED results.
- 6Direct-to-Consumer (DTC) operating loss widened significantly in the quarter to $887 million from $290 million due to increased programming and production costs, as well as higher marketing expenses, particularly for Disney+ and Hulu.
- 7The company ended the quarter with $13.3 billion in cash, cash equivalents, and restricted cash, and had $12.25 billion in available committed credit facilities.