Disney Undervalued After In Line Quarter

Revenue for the quarter increased 3% year on year to $15.4 billion. Media networks revenue was flat as the 3% decline at the broadcasting segment was offset by the 1% increase at cable networks. Affiliate fee revenue was up 7% in the quarter with growth at both cable and broadcasting as higher rates offset the 3% decline in subscribers. The ad revenue at broadcast networks suffered due to a tough comp with the presidential election last year. Parks and resorts growth of 13% reflected the growth at Paris and the impact of hurricanes on last year’s domestic operations. Disneyland Paris continues to benefit from its 25th anniversary celebration as attendance, guest spending, and hotel occupancy all improved. The park has been profitable for the last three quarters, a clear indication of the progress made over the last few years. Revenue at the studio segment fell 1% despite a strong theatrical quarter as the weakness in home entertainment and television distribution more than offset the box office grosses from Thor, Coco, and The Last Jedi. Segment operating income for the firm improved by 1% to $4.0 billion as the revenue growth was mostly offset by increased marketing and programming costs.

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