The Walt Disney Co. on Tuesday reported results for the quarter ending June 30 that included broadcasting segment revenues of $1.7 billion, a 5% increase from $1.6 billion in the year-ago quarter.
Broadcasting operating income decreased 6% to $282 million due to lower network advertising revenues, higher equity losses from Hulu and increased cost write downs for network programming, partially offset by affiliate revenue growth and higher operating income from program sales.
Lower network advertising was driven by lower ratings, partially offset by higher rates. Higher equity losses from Hulu reflected increased programming, marketing and labor costs, partially offset by higher subscription and advertising revenues.
Affiliate revenue growth was primarily due to contractual rate increases. Higher operating income from program sales was due to a subscription video on demand sale of How to Get Away with Murder.
Cable Networks segment revenues for the quarter increased 1% to $4.2 billion and operating income increased 1% to $2.1 billion. The increase in operating income was due to growth at ESPN, partially offset by a decrease at the Disney Channels, lower equity income from A&E and lower Freeform results. The increase at ESPN was due to affiliate and advertising revenue growth, partially offset by higher programming costs.
Affiliate revenue growth was due to contractual rate increases, partially offset by a decline in subscribers and an unfavorable impact from foreign currency translation. Higher advertising revenue was due to an increase in units sold, which included the benefit of an additional NBA championship game. The programming cost increase was driven by renewals for the Masters and international soccer rights and contractual rate increases for the NBA and MLB.
The company as a whole reported quarterly revenues of $14.2 billion, up 9% from a year earlier, while net income grew 5% to $2.6 billion.
Read the company’s report here.
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