Going into media giant Walt Disney's (NYSE: DIS) second-quarter financial report, the company was fresh off record performance of Marvel's Black Panther, which broke into the top 10 in all-time worldwide box office, bumping Star Wars: The Last Jedi from the No. 9 position and generating more than $1.338 billion in global ticket sales.
Investors were hoping that the record Marvel showing combined with robust visits to Disney parks and resorts would be enough to continue the return to growth that began last quarter -- and that's exactly what happened.
The raw numbers
For the just-completed quarter, Disney reported revenue of $14.548 billion, up 9% year over year and exceeding analysts' consensus estimates for revenue of $14.08 billion. Net income grew 23% year over year, generating adjusted earnings per share of $1.84, an increase of 23% over the prior-year quarter and handily beating expectations for $1.69.
On a GAAP basis, earnings per share grew 30% to $1.95.
Revenue was up across all of the company's operating segments, marking the second successive quarter of year-over-year revenue growth.
Media networks revenue grew 3% year over year to $6.1 billion, while operating income for the segment fell 6% to $2.08 billion. Disney blamed the drop on higher programming costs at ESPN, which was partially offset by affiliate revenue growth and higher advertising. The company also said that investments in BAMTech -- the company's streaming segment -- played a part in the decline.
The parks and resorts business handed in another strong performance, with revenue of $4.88 billion that grew 13% compared to the prior-year quarter on stronger attendance and guest spending. Operating income in the segment grew 27% year over year to $954 million.
Studio entertainment also shined, with revenue that increased 21% over the prior-year quarter on the strong box office success of Black Panther. Operating income of $847 million was up 29% year over year.
Consumer products revenue increased 2% year over year, though operating income fell 4% to $354 million as the result of lower same-store sales and an unfavorable currency impact.
The strength in the studio segment was primarily the result of the blockbuster success of Black Panther, which Disney's chairman and CEO Bob Iger called out on the conference call.
Disney doesn't provide quarterly guidance, but analysts' consensus estimates for the upcoming third quarter are for revenue of $15.3 billion, which would represent growth of 7.5% compared to the year-ago quarter. Investors' expectations have been rising, based on the box office success of Black Panther and Avengers: Infinity War. Consensus estimates for earnings have increased to $1.96 per share, which would represent growth of 24% year over year.
While investors seemed unimpressed with the performance, Disney continues to make all the right moves to position the company for future success.
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Danny Vena owns shares of Walt Disney and has the following options: long January 2019 $85 calls on Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.