The Walt Disney Co. on Tuesday reported results for the quarter ending March 31 that included a broadcasting segment revenues of $1.8 million, a 3% increase from the year-ago quarter.
Broadcasting operating income decreased 8% to $278 million due to lower operating income from program sales and higher programming and marketing costs, partially offset by advertising and affiliate revenue growth. Lower operating income from program sales was due to a significant SVOD sale in the prior-year quarter and a higher cost mix of programs sold in the current quarter.
The company said the increase in programming costs was due to a higher average cost of new scripted programming and increased program cost write-offs. The increase in network advertising revenue was due to higher rates, partially offset by lower ratings. Affiliate revenue growth was primarily due to contractual rate increases.
Cable Networks segment revenues for the quarter decreased 2% to $4 billion and operating income increased 12% to $2.0 billion due to an increase at ESPN, partially offset by lower equity income from A&E. The increase at ESPN was due to the benefit of lower programming costs and higher affiliate revenues, partially offset by a decrease in advertising revenue.
Cable results benefited from the timing of its fiscal quarter end relative to when College Football Playoff (CFP) bowl games were played, which resulted in a decrease in programming costs and advertising revenue. One CFP game was aired in the current quarter, whereas seven CFP games were aired in the second quarter of the prior year.
Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers. Lower advertising revenue was due to lower ratings and rates, which were negatively impacted by the timing of CFP bowl games, partially offset by higher units sold. Lower equity income from A&E was due to a decrease in advertising revenue, higher programming costs and a negative impact from the conversion of the H2 channel to Viceland as Viceland is in a start-up phase.
The company as a whole reported quarterly revenues of $13 billion, a 4% increase, and net income of $2.1 billion, up 2%.
Read the company’s report here.
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