Breaking Down Disney's Q1 Earnings, Streaming Revenue, ESPN & More

Disney (DIS - Free Report) reported better-than-expected Q1 fiscal 2019 financial results after the closing bell Tuesday. These results, however, marked downturns from the first quarter of 2018. Still, Wall Street was likely more intrigued to see how Disney's newly revamped business units performed as the company prepares to enter the streaming TV age and take on Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report).

Q1 Overview

Disney’s revenues came in slightly lower than the year-ago period’s $15.351 billion at $15.303 billion. This fell well below Q4 2018’s 12% top-line expansion but managed to top our $15.18 billion Zacks Consensus Estimate. Meanwhile, the company reported adjusted EPS of $1.84, which marked a 3% decline from the year-ago period, yet crushed our $1.57 a share estimate that would have represented a nearly 17% downturn.

With that covered, it’s time to see how Disney’s key business units performed. But before we dive into this, investors should note the media powerhouse changed its core four business units as it enters a new streaming-focused phase.  

Direct-to-Consumer & International is one of Disney’s two new divisions, and it will be closely watched for years to come. Interactive Media was previously grouped together with Consumer Products, which is now joined together with Parks and Resorts to form the Parks, Experiences & Consumer Products unit. Clearly, this makes year-over-year results harder to compare this quarter and for the rest of 2019, but it was necessary for Disney to make the change.

Unit Revenue 

Disney’s Media Networks division revenue climbed 7% to $5.921 billion. But as we mentioned, the prior-year quarter’s results have been changed to reflect the new division breakdowns. More specifically, Cable Networks revenue jumped 4%. However, Disney’s closely-watched ESPN division saw its operating income fall based on higher programming costs. Meanwhile, Broadcasting revenues popped 12%.

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