Disney Reports Lower Licensing Income from Star Wars, Cars
Disney’s Parks, Experiences and Consumer Products business posted a 10% increase in operating income to $2.15 billion in Q1 ended Dec. 29, despite lower licensing income from Star Wars and Cars-related products, Disney said. Revenue rose 5% to $6.8 billion.
An increase in third-party royalty expenses was partly offset by a rise in minimum guarantee shortfall recognition and increased revenue from Spider-Man-related products.
Studio entertainment revenue decreased 27% to $1.8 billion and operating income fell 63% to $309 million, due largely to lower theatrical revenue, the company said. The downturn in theatrical was tied to Q3 film releases Mary Poppins Returns, The Nutcracker and Four Realms not meeting the “strong performance” of Star Wars: The Last Jedi and Thor: Ragnarok from a year earlier.
Overall, Q1 net income dropped 39.5% to $2.7 billion amid a $15 million restructuring charge and increased expenses tied to its acquisition of 21st Century Fox and development of the Disney+ streaming service that is expected to launch late this year.