Fiscal 2017 revenues were lower for the company’s Consumer Products division due to the exceptional performance of Star Wars in the year prior.
NORTH AMERICA–The Walt Disney Company reported a slight decline in earnings for fiscal year 2017, due primarily to the record performance of Star Wars in the previous fiscal year, which turns out to be difficult to match.
For the company’s fourth quarter, the company reported earnings of $1.07 per share and revenues of $12.8 billion, a decline of three percent compared to the previous year’s quarter. Meanwhile, the company’s full-year revenues were approximately $55.14 billion, a 1 percent decline compared to last year, which saw revenues climb to roughly $55.63 billion.
Furthermore, the company reported that the declines were due to lower segment operating income and higher net interest expenses. Lower segment operating income was due to declines in the Media Networks, Studio Entertainment and Consumer Products & Interactive Media businesses, but was partially offset by growth at Parks and Resorts. For the full year, the Media Networks business reported earnings of roughly $6.9 billion, an 11 percent decrease from the prior year; the Studio Entertainment business reported approximately $2.36 billion, a 13 percent decrease compared to last year; the Consumer Products & Interactive Media business reported revenues of roughly $1.74 billion, an 11 percent decrease compared to 2016; and the Parks and Resorts segment reported an earnings of nearly $3.78 billion, a 14 percent increase from last year.
Lower revenues for Studio Entertainment and Consumer Products & Interactive Media were due to the exceptional performance of the Star Wars franchise in the year prior, which benefited the company’s key distribution channels. Meanwhile, growth at Parks and Resorts was due to increases at the company’s international and domestic operations.
Furthermore, the company’s Consumer Products & Interactive Media revenues for the quarter decreased 6 percent to $1.2 billion, and segment operating income decreased 12 percent to $373 due to a decrease within the merchandise licensing business. However, lower results for the company’s licensing business were due to a decreased in earned licensing revenues, higher third-party royalty expense and an unfavorable impact from foreign currency translation. Lower earned licensing revenues were also due to decreased sales of merchandise based on Star Wars, Frozen and Finding Dory. This was partially offset by increases from merchandise based on Cars and Spider-Man.
“No other entertainment company is better equipped to navigate the ever-evolving media landscape, thanks to our unparalleled collection of brands and franchises and our ability to leverage IP across our entire company,” says Bob Iger, chairman and chief executive officer, The Walt Disney Company. “We look forward to launching our first direct-to-consumer streaming service in the new year, and we will continue to invest for the future and take the smart risks required to deliver shareholder value.”