Summary
The Walt Disney Company's (DIS) fiscal third quarter 2022 report (ending July 1, 2022) demonstrates robust top-line growth, with total revenues increasing by 26% year-over-year to $21.5 billion. This growth was primarily driven by a significant rebound in the Parks, Experiences and Products (DPEP) segment, which saw revenues surge by 70% due to the easing of COVID-19 restrictions and increased guest spending. The Media and Entertainment Distribution (DMED) segment also saw revenue growth of 11%, albeit with a decline in operating income, reflecting higher costs associated with direct-to-consumer (DTC) services and content. Net income attributable to Disney shareholders saw a substantial increase of 53% to $1.4 billion, translating to diluted EPS from continuing operations of $0.77, up from $0.50 in the prior year. This improvement was largely due to the strong performance of the DPEP segment, which more than offset the increased operating losses in the DTC business within DMED. While the company is navigating inflationary pressures and ongoing content investments, the recovery in its theme parks and the continued expansion of its streaming services present a dynamic financial picture for investors.
Key Highlights
- 1Total revenues increased by 26% year-over-year to $21.5 billion, driven by strong performance across segments.
- 2Diluted EPS from continuing operations rose to $0.77 from $0.50 in the prior year, reflecting improved profitability.
- 3The Parks, Experiences and Products (DPEP) segment experienced a significant revenue increase of 70% to $7.4 billion, driven by higher attendance and per capita spending, indicating a strong recovery from pandemic-related impacts.
- 4The Direct-to-Consumer (DTC) business within the Media and Entertainment Distribution (DMED) segment reported an increased operating loss of $1.06 billion, up from $293 million in the prior year, due to higher programming and marketing costs.
- 5Disney+ subscribers grew 31% year-over-year to 152.1 million, with average revenue per user (ARPU) increasing globally.
- 6The company's cash provided by operations increased by 19% to $3.5 billion for the nine months ended July 2, 2022, signaling improved cash flow generation.
- 7Capital expenditures increased significantly, reflecting investments in cruise ship fleet expansion and corporate facilities, with total capital expenditures expected to reach $5 billion for fiscal year 2022.