The Walt Disney Company is off to a strong start in 2019, reporting $15.3 billion in revenue in its most recent quarter. But not all of the company's segments experienced year-over-year growth.
The beat on analyst expectations for the first fiscal quarter of 2019 can be attributed largely to two of its segments; a 5% increase to $6.8 billion in revenues from "Parks, Experiences & Consumer Products," and a 7% increase to $5.9 billion in revenues from "Media Networks."
Perhaps the most shocking number was the 27 percent decline in revenues from Disney's "Studio Entertainment" segment, although if we look closely it's not hard to figure out why. We can attribute the steep decline to the lack of releases for its two major franchises:
Star Wars and
Marvel.
Disneys Q1 FY2018 was boosted by the commercially successful theatrical releases of
Star Wars: The Last Jedi and
Thor: Ragnarok.
As Disney explained in their earnings report release:
The decrease in theatrical distribution results was due to the strong performance of Star Wars: The Last Jedi and Thor: Ragnarok in the prior-year quarter compared to Mary Poppins Returns and The Nutcracker and the Four Realms in the current year. Other significant releases included Ralph Breaks the Internet in the current quarter, while the prior-year quarter included Coco.
The Last Jedi earned over $1.3 billion at the global box office when it was all said and done, but mixed reactions from fans are believed to have impacted the results of
Solo: A Star Wars Story. As a result, Disney and Lucasfilm have slowed the pace at which new
Star Wars films are released.
Marvel Studios, meanwhile, remains hot. After a front-loaded first half of 2018 which saw record-breaking box office performances from
Avengers: Infinity War and
Black Panther, Disney seemingly relied on its other properties for the holiday season. Both
Mary Poppins and
The Nutcracker came up short, which explains the 27% drop.
At the end of the day, the 27% drop is shocking to look at on paper, but there's really no cause for alarm. In just a few weeks, we'll be graced with
Captain Marvel, the first female-led superhero movie from Marvel Studios, and
Avengers: Endgame, the highly anticipated follow-up to
Infinity War. Later in 2019, we're getting
Star Wars: Episode IX, the conclusion to the latest trilogy.
Basically, what we've learned is that Disney's Studio Entertainment success rides or dies on the success of
Marvel and
Star Wars.
Disney is currently hosting its earnings results webcast, so be sure to check back with any new information we hear.