Revenue Analysis
Total and Operating Revenue: Disney’s operating revenue has shown fluctuations over the periods. From $22.33 billion in June 2023, it increased to $21.24 billion in September 2023, and further to $23.549 billion by December 2023. There is a direct correlation between total and operating revenue, indicating most revenue is from core operations.
Gross Profit Margins: Gross profit has shown modest volatility: $7.859 billion in June 2023, increased to $7.513 billion in September 2023, and significantly rose to $7.962 billion by December 2023. This increase reflects either improved sales efficiencies or adaptations in product/service mix, enhancing margin gains.
Cost Management
Cost of Revenue: Cost of revenue has been fairly stable: ranging from roughly $14.471 billion to $15.587 billion, which coincides with the operational revenue changes.
Operating Expense and Total Expenses: Operating expenses and total expenses have similarly followed revenue trends. For instance, total expenses rose from $19.689 billion in June to $20.613 billion in December 2023. These figures signify tight control over operational spending relative to revenue.
Profitability Analysis
EBITDA: EBITDA has seen improvement from $1.713 billion in June to $4.642 billion by December. Such restoration in EBITDA implies an operational turnaround or reduction in large, unusual cost items recognized in earlier periods.
Operating Income: Correspondingly, operating income increased from $0.369 billion in June 2023 to $2.936 billion in December 2023, a substantial improvement highlighting efficient operations or reduced unusual expenses.
Pretax Income and Net Income: Pretax and net income metrics have recovered over the observed periods. From a pretax loss of $134 million in June 2023, it rebounded to a profit of $2.871 billion by December. Net income reflected this growth, significant recovery illustrating effective tax management and operational efficiency.
Cash Flow Indicators
Reconciled Depreciation: Depreciation costs have been stable, showing careful management of asset depreciation contributing slightly to cash flows.
Interest Expense: Interest expense remained stable at around $500 million throughout the periods, indicating consistent debt servicing without any significant new debt or repayment.
Taxation
Tax Rate and Provision: The effective tax rate varied between 0.21 to about 0.31, reflecting variations in taxable income, deductions, and potential adjustments. Tax provisions followed pretax income movements, a normal correlation in corporate finance.
Shareholder Metrics
Diluted and Basic EPS: Earnings per Share (EPS) has shown significant recovery from -0.25 in June 2023 to 1.04 by December. This recovery was a result of rebounding net income supported by stable average share counts, thus benefiting shareholders.
Conclusion
The analysis reveals Disney’s effective management of revenues, costs, and strategic adjustments in 2023. The key takeaway is the recovery in profitability measures like EBITDA, operating income, and net income. Moving forward, it will be crucial for Disney to maintain revenue growth, manage operational costs, and effectively utilize its assets to enhance shareholder value and sustain its financial health.