Disney Sees Studio Revenue Soar

The Walt Disney Company on Tuesday said that the success of Marvel's "Black Panther" helped drive 21 percent year-over-year revenue growth for its studio entertainment business, according to CNBC.

Disney's studios saw $2.45 billion in revenue for the quarter. That figure bested Wall Street expectations for $2.19 billion in revenue, according to a StreetAccount consensus estimate.

Bob Iger

In the current quarter, Marvel's "Avengers: Infinity War" had the biggest opening weekend of all time, both domestically and globally. The latest installment of the Avengers franchise crossed $1 billion at the global box office in just 11 days. That pace is faster than any other movie in history.

In a Tuesday call with analysts, Chairman and CEO Bob Iger said Disney "delivered nine of the top 10 biggest domestic box office openings of all time — all of them released within the last six years."

Here's what each business unit reported in revenue compared with what analysts expected, according to StreetAccount consensus estimates:

• Media and networks: $6.14 billion vs. $6.09 billion expected
• Parks and resorts: $4.88 billion vs. $4.69 billion expected
• Studio: $2.45 billion vs. $2.19 billion expected
• Consumer and interactive: $1.08 billion vs. $1.14 billion expected

Disney's earnings report comes after its blockbuster deal to acquire many parts of Twenty-First Century Fox. The boards of both companies asked longtime CEO Iger to stay on through the end of 2021.

If completed, Disney would get Fox's television and film studios, regional sports networks, cable channels National Geographic and FX. The entertainment giant would also grow its international presence through Asian pay-TV operator Star India and a stake in Sky TV. It would also get Fox's stake in Hulu. That plus its existing position would give Disney a controlling stake in the streaming service.

In its earnings report, the Burbank, Calif., company attributed a 4% drop in operating income at its cable networks to continued investment in its BAMTech streaming platform, including the new ESPN+, higher programming costs at ESPN and lower ad revenue at Freeform. Broadcast revenue and operating income essentially were flat, with higher affiliate revenue offsetting lower ad revenue and higher programming and marketing costs, according to The Street.

ESPN+ launched April 12 for $4.99 per month, following the end of the quarter.

"The reviews have been strong, and the response from sports fans has been enthusiastic," Iger said on the call, declining to provide statistics on viewership thus far aside from "so far, so good."

The CEO said Disney would continue to invest in live and nonlive sports content for the product, asserting there was ample opportunity to fuel it with material not on its ESPN TV network. Iger noted the five-year deal revealed Monday under which ESPN+ will air 15 live UFC events starting in 2019.

As expected, there was plenty of Fox deal talk during Disney’s second-quarter earnings call Tuesday. Comcast is preparing to crash that party with a possible hostile bid for the key 21st Century Fox assets Disney is planning to snap up. But Disney Chief Executive Robert Iger appeared to brush aside the Comcast threat, telling analysts he is “confident the assets we’re in the process of acquiring” will easily fit within Disney once the deal is approved. Fox properties such as its regional sports networks and National Geographic could boost Disney’s streaming services—and, if the Fox deal does go through, Disney would become the majority shareholder for the Hulu streaming service, for which it plans to produce more original programming.