May 8, 2018
Strong home media sales of Star Wars: The Last Jedi, Thor: Ragnarok and Coco in the second quarter (ended March 31) contributed to Walt Disney Studios generating a 21% increase in revenue to $2.5 billion, and segment operating income increasing 29% to $847 million.
Studio income grew as well due to increases in theatrical and TV/SVOD distribution results, partially offset by higher film cost impairments.
The increase in theatrical distribution results was due to the blockbuster success of Black Panther, with no comparable Marvel title in the prior-year quarter. This increase was partially offset by the performance of A Wrinkle in Time compared with Beauty and the Beast in the prior-year quarter.
Growth at home entertainment was driven by higher average net effective pricing and an increase in unit sales, both of which reflected the successful March 27 retail release of The Last Jedi.
The studio generated higher Last Jedi Blu-ray and DVD unit sales compared with disc unit sales of Rogue One: A Star Wars Story in the prior-year third quarter. In addition, Thor: Ragnarok and Coco outperformed Moana and Doctor Strange in year-over-year results.
Indeed, Coco and Thor: Ragnarok rank first and third among the top-selling discs in 2018, according to The-Numbers.com, which calculates the titles have brought in than $74 million in combined revenue.
Higher TV/SVOD distribution results were due to international growth and the domestic free television sale of Star Wars: The Force Awakens in the current quarter.
“Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our [direct-to-consumer] platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth,” CEO Bob Iger said in a statement.
As expected, Disney’s equity stake in Hulu, which it co-owns with 21st Century Fox, Comcast and Time Warner, generated higher losses for its corporate partners than in the previous-year period. The loss at Hulu was driven by higher programming, marketing and labor costs, partially offset by growth in subscription and advertising revenue.