01—Abstract
Summary
Summary of the 10-Q filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.
The Walt Disney Company's (DIS) Q2 2024 report shows a slight increase in total revenues, reaching $22.1 billiona, up 1% year-over-year.
However, the company reported a net loss attributable to Disney of $20 millionb, a significant drop from the $1.3 billion net income in the prior year's quarter. This downturn was largely driven by substantial restructuring and impairment charges, including a $2.05 billion goodwill impairment related to Star India and entertainment linear networks. Despite the net loss, the 'Experiences' segment demonstrated robust growth, with revenues up 10% and operating income up 12%.
The Direct-to-Consumer segment also showed improvement, narrowing its operating loss to $47 millionc from a loss of $587 million in the prior year, indicating progress in its strategic shift. The company also authorized a new share repurchase program, signaling confidence in its financial position and commitment to shareholder returns.
02—Key points
Key Highlights
- Total revenues increased by 1% to $22.1 billion for the quarter.
- Reported a net loss attributable to Disney of $20 million, compared to a net income of $1.3 billion in the prior year's quarter.
- Significant restructuring and impairment charges of $2.05 billion, primarily due to goodwill impairments, impacted the quarter's profitability.
- The 'Experiences' segment revenue grew 10% to $8.4 billion, with operating income up 12% to $2.3 billion.
- The Direct-to-Consumer segment narrowed its operating loss to $47 million from $587 million in the prior year.
- Disney announced a new share repurchase program authorizing up to 400 million shares.
- Disney's commitment to its cruise line business is evident with increased capital expenditures in the Experiences segment.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed May 7, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $22.08B$21.82B | +1.2% |
| SG&A Expenses | $3.79B$3.61B | +4.9% |
| Operating Expenses | $19.20B$19.54B | −1.7% |
| Operating Income | $3.85B$3.29B | +17.0% |
| Interest Expense | $501.00M$504.00M | −0.6% |
| Net Income | -$20.00M$1.27B | −101.6% |
| EPS (Basic) | $-0.01$0.70 | −101.4% |
| EPS (Diluted) | $-0.01$0.69 | −101.4% |
| Shares Outstanding (Basic) | 1.83B1.83B | +0.3% |
| Shares Outstanding (Diluted) | 1.83B1.83B | +0.2% |
05—Questions
Frequently Asked Questions
What is the primary reason for the significant decrease in net income attributable to Disney compared to the prior year's quarter?
The primary reason for the significant decrease in net income attributable to Disney is the substantial restructuring and impairment charges totaling $2.05 billion, which includes a goodwill impairment charge related to the Star India Transaction and entertainment linear networks. This contrasts with the prior-year quarter, which did not have comparable impairment charges.
How did the different business segments perform in this quarter?
The 'Experiences' segment showed strong performance with a 10% revenue increase and a 12% rise in operating income, driven by theme park admissions and resort revenues. The 'Entertainment' segment saw a 5% revenue decrease primarily due to lower theatrical and TV/VOD distribution revenues, though its Direct-to-Consumer (DTC) business significantly narrowed its operating loss. The 'Sports' segment experienced a 2% revenue increase, with affiliate fees slightly down but advertising revenue up.
What is the significance of the new share repurchase program?
The authorization of a new share repurchase program for up to 400 million shares signals the company's confidence in its financial health and its commitment to returning value to shareholders. This program provides flexibility for future capital allocation.
What is the company's outlook on its streaming business (Direct-to-Consumer)?
The Direct-to-Consumer segment showed improvement by narrowing its operating loss to $47 million from $587 million in the prior year. This indicates progress in their strategy to achieve profitability in the streaming business, driven by subscriber growth and increased average revenue per user, particularly in the domestic Disney+ and Hulu services.
06—Continue