The Walt Disney Company on Tuesday posted fiscal third-quarter earnings marked by increases in revenues and net income despite declines at BAMTech and Hulu.
Revenues totaled $15.2 billion, up 7% year over year, and net income jumped a whopping 23% to $2.9 billion. The increase came along with earnings per share jumping 29% year over year to $1.95.
“We’re pleased with our results in the quarter, including a double-digit increase in earnings per share, and excited about the opportunities ahead for continued growth,” said Disney CEO Bob Iger in a statement. “Having earned the overwhelming support of shareholders, we are more enthusiastic about the 21st Century Fox acquisition than ever, and confident in our ability to fully leverage these assets along with our own incredible brands, franchises and businesses to drive significant value across the entire company.”
Disney’s media networks business—which houses its cable networks, broadcast operations and BAMTech—notched a 5% rise in revenues, up to $6.15 billion during the quarter. Cable networks’ revenue rose 2% but its operating income fell 5%, while broadcasting revenues rose 11% and operating income shot up 43%.
For cable networks, the lower operating income was due to a loss at BAMTech and a decrease at Freeform, which were surprisingly offset somewhat by an increase at ESPN. ESPN’s increase came from affiliate revenue growth due to contractual rate increases, partially offset by a decline in subscribers. Returns for ESPN were partially offset by higher programming costs and a decrease in advertising revenue.
But the loss at BAMTech, which is now reported as part of cable networks after Disney acquired a majority stake, was due to higher content and marketing costs and ongoing investments in their technology platform including costs associated with ESPN+.
Broadcasting revenues rose 11% to $2 billion and operating income rose 43% to $361 million thanks to higher program sales, affiliate revenue growth and increased network advertising revenue, partially offset by higher programming costs.
A+E Networks and Hulu, both reported as Equity in the Income of Investees, only chipped in $78 million after accounting for $127 million in the year-ago quarter. Hulu was hit by higher programming and labor costs, partially offset by growth in subscription and advertising revenue, and A+E fell due to lower advertising revenue and higher programming costs.