The Walt Disney Co. on Tuesday reported fiscal first quarter results that included a 7% increase in broadcasting revenues to $1.8 billion and a 7% decrease in operating income to $223 million due to higher programming costs and an increase in equity losses from Hulu, partially offset by advertising and affiliate revenue growth and higher program sales.
The company said the increase in programming costs was due to a higher average cost of new scripted programming and the costs of airing New Year’s Eve specials that aired in the second quarter of the prior year.
Higher equity losses from Hulu were due to increased programming and marketing costs driven by new content offerings, partially offset by higher subscription and advertising revenues.
The increase in broadcasting advertising revenue was due to higher units sold, higher rates and the airing of New Year’s Eve specials.
These increases were partially offset by lower network ratings and a decrease in political advertising at the owned television stations.
Cable Networks segment revenue increased 9% to $4.5 billion and operating income decreased 5% to $1.2 billion due to a decrease at ESPN and lower equity income from A&E, partially offset by growth at the domestic Disney Channels.
The company as a whole reported record quarterly earnings of $2.9 billion, compared to $2.2 billion for the prior-year quarter.
Read the company’s report here.
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