Theme parks were a big bright spot for media giant Disney’s latest quarterly earnings, with operating income from the properties more than doubling from a year earlier even with a $65 million hit to revenue from a storm-related shutdown.
CEO Bob Chapek told analysts Tuesday that the division that includes its parks “continued to deliver phenomenal results despite the impact of Hurricane Ian,” which spurred a two-day closing of Walt Disney World in Florida in late September as the severe weather system moved through the region.
The park was generally spared the damage of Florida communities to the southwest that were devastated by the hurricane, though the closing resulted in a significant reduction in revenue for lost attendance and sales of food and merchandise.
Still, Burbank, California-based Disney reported the division that includes its U.S., Europe and Asia theme parks posted a 36% gain in revenue from a year earlier for its fourth quarter that ended Oct. 1, reaching $7.4 billion and counteracting a 3% revenue drop in its media and entertainment distribution division.
Net operating income for the parks division more than doubled to $1.5 billion for the quarter and $7.9 billion for the full fiscal year. Chief Financial Officer Christine McCarthy said international visitors, an important generator of attendance at Disney World in particular, approached pre-pandemic levels in the latest quarter after more than two years of global travel restrictions that blunted business at the Florida park.
Theme parks are catalysts for hotel, retail and other nearby commercial demand nationwide. Disney rival Comcast last month reported that its Universal theme parks were among its largest revenue and profit gainers in its latest quarter, and other U.S. operators have reported similar gains in attendance and revenue during the past year.
However, the theme park industry is dealing with staffing challenges and is not expected to fully return to pre-pandemic attendance and revenue levels until late 2023 or early 2024, according to consulting firm International Theme Park Services.
Disney executives said the company posted gains in attendance from new attractions at its Paris venue, but faces challenges related to recurring COVID outbreaks in Asia. The company’s park in Shanghai has been closed since Oct. 31 as China looks to contain its latest outbreak, and Chapek said the company did not know as of Tuesday when it might reopen.
Disney executives said the company expects to reach profitability by 2024 on its investments in its growing direct-to-consumer streaming services, which posted a $1.5 billion operating loss in the latest quarter despite an 8% revenue gain. The company is investing in new content for the streaming services as it prepares to roll out lower-priced, ad-supported versions of offerings including Disney+.
For its fourth quarter ended Oct. 1, Disney reported total revenue rose 9% from the year-earlier quarter to $20.2 billion, with net income rising 1% to $162 million. For the full 2022 fiscal year, revenue increased 23% from a year earlier to $82.7 billion, with net income climbing 58% to $3.1 billion.