Theme Parks and Blockbusters: The Media Sector's Earnings Season
Filmed Entertainment segment
Now let’s take a look at the Filmed Entertainment segment of the media companies. On February 22, 2016, Benzinga reported that 21st Century Fox’s (FOXA) movie Deadpool had earned $237 million to date at the US box office. Kung Fu Panda 3, which was a highly anticipated sequel by the studio, is also tasting success and has earned $117 million to date at the US box office.
In fiscal 2Q16, 21st Century Fox’s Filmed Entertainment segment was the second-largest contributor to the company, representing 30% of its total revenues of $7.4 billion in 2Q16.
This segment saw revenues of $2.4 billion in fiscal 2Q16—a decline of $392 million over fiscal 2Q15 and OIBDA (operating income before depreciation and amortization) of $302 million, down $34 million or around 10% from its OIBDA in fiscal 2Q15.
Peer company performances
By comparison, Comcast’s (CMCSA) Universal Pictures had its most profitable year in fiscal 2015, with operating cash flow of $1.2 billion, a rise of 74% over fiscal 2014. Universal Pictures movies like Jurassic World and Minions drove revenue growth for this division. This segment saw revenues of $1.6 billion in 4Q15, up by 25.8% over 4Q14.
The Walt Disney Company’s (DIS) Studio Entertainment segment saw revenues of $2.7 billion in fiscal 1Q16, up by 46% year-over-year, largely driven by the success of Star Wars: The Force Awakens.
Disney makes up 0.87% of the iShares Core S&P 500 ETF (IVV). For an investor interested in the information technology sector, IVV has an exposure of 3.8% to the sector. IVV also holds 2.5% of Microsoft (MSFT).
In the next part of this series, we will explore the performance of the theme parks segment.
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