The Walt Disney Company Reports Fourth Quarter and Full Year Earnings for Fiscal 2023
BURBANK, Calif.----November 08, 2023--
The Walt Disney Company (NYSE: DIS) today reported earnings for its fourth quarter and full year ended September 30, 2023.
Financial Results for the Quarter and Full Year:
-- Revenues for the quarter and year grew 5% and 7% compared to the
prior-year quarter and prior year, respectively.
-- Diluted earnings per share (EPS) from continuing operations for the
quarter increased to $0.14 from $0.09 in the prior-year quarter and for
the year, decreased to $1.29 from $1.75 in the prior year.
-- Excluding certain items(1), diluted EPS for the quarter increased to
$0.82 from $0.30 in the prior-year quarter and for the year, increased to
$3.76 from $3.53 in the prior year.
Key Points:
-- Disney+ added nearly 7 million core subscribers in the fourth quarter.
Key streaming content in the quarter included theatrical titles Elemental,
Little Mermaid and Guardians of the Galaxy Vol. 3., original series
Ahsoka and the Korean original series Moving.
-- We continue to expect that our combined streaming businesses will reach
profitability in Q4 of FY24, although progress may not look linear from
quarter to quarter.
-- Domestic ESPN revenue and operating income grew year over year in both
fiscal year 2022 and fiscal year 2023, demonstrating the value of sports
and the power of the ESPN brand.
-- Experiences operating income increased by over 30% versus the
prior-year quarter, with year over year growth across all international
sites, Disney Cruise Line, Disney Vacation Club and Disneyland Resort. At
Walt Disney World, we continue to manage against wage inflation and
challenging comparisons to the prior year from the 50th anniversary
celebration.
-- We continue to aggressively manage our cost base, and have increased
our annualized efficiency target to $7.5 billion, versus $5.5 billion
previously.
-- We expect to grow free cash flow in fiscal 2024 significantly versus
fiscal 2023, approaching levels last seen pre-pandemic. This continued
robust free cash flow growth, alongside our strong balance sheet, will
position us well to address our investment and shareholder goals for the
year and going forward.
“Our results this quarter reflect the significant progress we’ve made over the past year,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again. We have a solid foundation of creative excellence and innovation built over the past century, which has only been reinforced by the important restructuring and cost efficiency work we’ve done this year, and we’re on track to achieve roughly $7.5 billion in cost reductions. Combined with our portfolio of valuable businesses, brands and assets — and the way we manage them together — Disney has a strong hand that differentiates us from others in our industry.
“As we look forward, there are four key building opportunities that will be central to our success: achieving significant and sustained profitability in our streaming business, building ESPN into the preeminent digital sports platform, improving the output and economics of our film studios, and turbocharging growth in our parks and experiences business. We have already made considerable advancements in these four areas and will continue to move forward with a sense of purpose and urgency, and I’m bullish about the opportunities we have before us to create lasting growth and increase shareholder value.”
_________________
(1) Diluted EPS excluding certain items is a non-GAAP financial measure.
The most comparable GAAP measure is diluted EPS from continuing
operations. See the discussion on pages 16 through 18 for how we define
and calculate this measure and a reconciliation thereof to the most
directly comparable GAAP measure.
The following table summarizes fourth quarter and full year results for fiscal 2023 and 2022:
Quarter Ended Year Ended
---------------- ----------------
($ in millions, Sept. Sept.
except per share 30, Oct. 1, 30, Oct. 1,
amounts) 2023 2022 Change 2023 2022 Change
------- ------- -------- ------- ------- --------
Revenues $21,241 $20,150 5% $88,898 $82,722 7%
Income from
continuing
operations
before income
taxes $ 1,007 $ 376 >100% $ 4,769 $ 5,285 (10)%
Total segment
operating
income(1) $ 2,976 $ 1,597 86% $12,863 $12,121 6%
Diluted EPS from
continuing
operations $ 0.14 $ 0.09 56% $ 1.29 $ 1.75 (26)%
Diluted EPS
excluding
certain
items(1) $ 0.82 $ 0.30 >100% $ 3.76 $ 3.53 7%
Cash provided by
continuing
operations $ 4,802 $ 2,524 90% $ 9,866 $ 6,002 64%
Free cash
flow(1) $ 3,428 $ 1,376 >100% $ 4,897 $ 1,059 >100%
The following table summarizes fourth quarter and full year segment revenue and operating income (loss) for fiscal 2023 and 2022:
Quarter Ended Year Ended
------------------ ------------------
Sept. Sept.
30, Oct. 1, 30, Oct. 1,
($ in millions) 2023 2022 Change 2023 2022 Change
-------- -------- -------- -------- -------- --------
Segment revenues:
Entertainment $ 9,524 $ 9,294 2% $40,635 $39,569 3%
Sports 3,910 3,900 --% 17,111 17,270 (1)%
Experiences 8,160 7,253 13% 32,549 28,085 16%
Eliminations(2) (353) (297) (19)% (1,397) (1,179) (18)%
------ ------ ------ ------
Total segment
revenues 21,241 20,150 5% 88,898 83,745 6%
Content License
Early
Termination(3) -- -- nm -- (1,023) 100%
------ ------ ------ ------
Total revenue $21,241 $20,150 5% $88,898 $82,722 7%
====== ====== ====== ======
Segment operating income
(loss):
Entertainment $ 236 $ (608) nm $ 1,444 $ 2,126 (32)%
Sports 981 863 14% 2,465 2,710 (9)%
Experiences 1,759 1,342 31% 8,954 7,285 23%
------ ------ ------ ------
Total segment
operating
income(1) $ 2,976 $ 1,597 86% $12,863 $12,121 6%
====== ====== ====== ======
(1) Total segment operating income, diluted EPS excluding certain items and
free cash flow are non-GAAP financial measures. The most comparable
GAAP measures are income from continuing operations before income
taxes, diluted EPS from continuing operations and cash provided by
continuing operations, respectively. See the discussion on pages 16
through 20 for how we define and calculate these measures and a
reconciliation thereof to the most directly comparable GAAP measures.
(2) Reflects fees paid by Direct-to-Consumer to Sports and other
Entertainment businesses for the right to air their linear networks on
Hulu Live and fees paid by Entertainment to Sports to program ESPN on
ABC and certain sports content on Star+.
(3) In February 2022, the Company terminated certain license agreements
with a customer for film and television content, which was delivered in
previous years, in order for the Company to use the content primarily
on our direct- to-consumer services (Content License Early
Termination).
DISCUSSION OF FOURTH QUARTER SEGMENT RESULTS
Entertainment
Revenue and operating results for the Entertainment segment are as follows:
Quarter Ended
-------------------- -----
Sept. 30, Oct. 1,
($ in millions) 2023 2022 Change
---------- -------- ---------
Revenues:
Linear Networks $ 2,628 $ 2,892 (9)%
Direct-to-Consumer 5,036 4,494 12%
Content Sales/Licensing and
Other 1,860 1,908 (3)%
-------- ------
$ 9,524 $ 9,294 2%
======== ======
Operating income (loss):
Linear Networks $ 805 $ 806 --%
Direct-to-Consumer (420) (1,406) 70%
Content Sales/Licensing and
Other (149) (8) >(100)%
-------- ------
$ 236 $ (608) nm
======== ======
Linear Networks