The Force Is With Undervalued Disney

Revenue increased by 14% year on year to $15.2 billion, well above our $14.4 billion estimate. The revenue growth occurred at all four segments, with studio entertainment leading the way with a 46% improvement. Segment operating income increased 20% to $4.3 billion, well above our $3.9 billion estimate, as the 86% improvement at studio entertainment and the more than 20% improvement at both the parks and resorts segment and the consumer segment more than offset the 6% decline at media networks. The decline at media networks was due to increased rights costs, foreign exchange impact, and the timing of the college football playoff games. The improvement in the parks and resorts segment was driven by improved domestic performance, and was slightly offset by increased preopening expenses for the Shanghai resort. The Shanghai resort is now scheduled to open on June 16, with ticket presales beginning on March 28.

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