The Walt Disney Company Inc (Disney) reported 9.8 per cent year-over-year (y-o-y) increase in operating income for the quarter ended 2 April 2016 (Q2-16, current quarter) as compared to the corresponding year ago quarter. Operating income in the current quarter was $3,822 million as compared to $3,482 million in Q2-15 (quarter ended 28 March 2015). The company saw an increase of $340 million in operating income in its current quarter vis-à-vis the corresponding prior year quarter. Its Media Networks segment reported operating income of $198 million, while its Studio Entertainment segment reported operating income of $115 million. Disney’s Media Networks segment’s sub-segment Cable Networks of which ESPN is a part saw 12.3 per cent y-o-y increase in operating income. The increase at ESPN was partially offset by lower equity income from A&E Television Networks says Disney. Disney reported 4.1 per cent y-o-y growth in revenue in Q2-16 at $12,969 million as compared to $12,461 million in the corresponding prior year quarter. Growth in revenue of $508 million was contributed to by $168 million and $377 million growth by Disney’s ‘Parks & Resorts’ and ‘Studio Entertainment’ segments respectively. Company speak “We’re very pleased with our overall results in Q2, which marks our 11th consecutive quarter of double-digit growth in adjusted EPS,” said Disney chairman and CEO, Robert A. Iger. “Our Studio’s unprecedented winning streak at the box office underscores the incredible appeal of our branded content, which we continue to leverage across the entire company to drive significant value. Looking forward, we are thrilled with the Studio’s slate and tremendously excited about the June 16th grand opening of the spectacular Shanghai Disney Resort.” Segment numbers excerpts Media Networks Media Networks revenue in Q2-16 was relatively flat y-o-y (declined 0.3 per cent) at $5,793 million as compared to $5,810 million in Q2-15. The segment’s operating income increased 9.4 per cent y-o-y to $2,299 million in the current quarter from $2,101 million during the corresponding prior year quarter. Disney Media Networks segment has two sub-segments – Cable Networking and Broadcasting. Cable Networks revenue for the quarter decreased 1.9 per cent y-o-y to $3,955 billion from $4,030 million in Q2-15. Operating income in Q2-16 increased 12.3 per cent y-o-y to $2,021 million from $1,799 million due to an increase at ESPN, partially offset by lower equity income from A&E. The increase at ESPN was due to the benefit of lower programming costs and higher affiliate revenues, partially offset by a decrease in advertising revenue. Lower equity income from A&E was due to a decrease in advertising revenue, higher programming costs and a negative impact from the conversion of the H2 channel to Viceland as Viceland is in a start-up phase says Disney. Broadcasting revenue for the quarter increased 3.3 per cent to $1,838 million from $1,780 million. Operating income of the sub-segment decreased 7.9 per cent y-o-y to $278 million from $302 million due to lower operating income from program sales and higher programming and marketing costs, partially offset by advertising and affiliate revenue growth. Lower operating income from program sales was due to a significant SVOD sale in the prior-year quarter and a higher cost mix of programs sold in the current quarter. The increase in programming costs was due to a higher average cost of new scripted programming and increased program cost write-offs. The increase in network advertising revenue was due to higher rates, partially offset by lower ratings. Affiliate revenue growth was primarily due to contractual rate increases. Parks and Resorts Parks and Resorts revenue for the current quarter increased 4.5 per cent y-oy- to $3,928 million from $3.760 million. Segment operating income in Q2-16 increased 10.2 per cent y-o-y to $624 million from $566 million. Operating income growth for the quarter was due to an increase at Disney’s domestic operations, partially offset by a decrease at its international operations. Studio Entertainment Studio Entertainment revenue for the current quarter increased 22.4 per cent to $2,062 million from $1,685 million in Q2-15. Segment operating income increased 26.9 per cent to $542 million from $427 million. Disney says that higher operating income was due to an increase in theatrical distribution results and growth in TV/SVOD distribution, partially offset by the impact of foreign currency translation due to the strengthening of the US dollar against major currencies, decreased home entertainment results and higher film cost impairments. The increase in theatrical distribution results was due to the strong performance of Star Wars: The Force Awakens and Zootopia in the current quarter compared to the continuing performance in the prior year quarter of Big Hero 6 and Into the Woods, both of which were released domestically in the first quarter of the prior year. Higher TV/SVOD distribution results were driven by international growth. The decrease in home entertainment results was primarily due to lower unit sales reflecting the performance of Big Hero 6, Frozen and Marvel’s Guardians of the Galaxy in the prior-year quarter compared to The Good Dinosaur, Inside Out and Marvel’s Ant-Man in the current quarter. The decrease from lower unit sales was partially offset by the benefit from Star Wars Classic titles that are distributed by a third party. Consumer Products & Interactive Media Consumer Products & Interactive Media revenue for the current quarter decreased 1.7 per cent to $1,186 million from $1,286 million. Segment operating income decreased 8 percent to $357 million from $388 million. Lower operating income was primarily due to the impact of foreign currency translation due to the strengthening of the U.S. dollar against major currencies, lower operating margins and comparable store sales at Disney’s retail business and lower results for Infinity. These decreases were partially offset by higher licensing revenues. Increased licensing revenues were driven by higher revenue from Star Wars merchandise, partially offset by an adverse impact from the timing of minimum guarantee shortfall recognition and a decrease in revenue from merchandise based on Frozen.