Disney profit, revenue misses Street as cable business weighs
Walt Disney Co (NYSE:DIS) reported lower-than expected quarterly revenue and profit on Thursday, dragged down by a poor performance at its cable business, including a drop in subscribers at ESPN.
The company’s shares fell about 3 percent to $99.59 in trading after the bell.
The results come after CNBC reported on Monday that Disney had, in the last few weeks, held talks about buying most of Twenty-First Century Fox’s (NASDAQ:FOXA) film and television assets. The two sides are not currently in discussion, CNBC had reported.
Disney did not address the report in its earnings release.
Disney and other media companies are battling “cord cutting” as viewers defect to streaming video services such as Netflix Inc (NASDAQ:NFLX) and Amazon.com Inc’s (NASDAQ:AMZN) Prime.
A deal with Fox would help Disney bring additional programming it could use to lure larger audiences and add significantly to its content library, especially as it plans to start providing its own streaming services.
Revenue from Disney’s cable business, which includes ESPN and Disney Channel, fell marginally to $3.95 billion in the fourth quarter, while analysts on average were expecting a rise to $4.06 billion, according to Thomson Reuters I/B/E/S.
ESPN, Disney’s cash-cow, has been trying to combat subscriber declines by joining smaller bundles of cable channels and developing a streaming service it will sell directly to consumers.
Disney’s movie business generated revenue of $1.4 billion in the quarter, down about 21 percent and missing analysts average estimate of $1.61 billion.
Disney’s total revenue fell to $12.78 billion in the quarter ended Sept. 30 from $13.14 billion a year earlier.
Net income attributable to the company declined to $1.75 billion from $1.77 billion. Excluding items, it earned $1.07 per share.
Analysts on average had expected a profit of $1.13 per share and revenue to rise to $13.23 billion.
Disney’s full-year adjusted profit was $5.70 per share. Chief Executive Bob Iger had warned in September that earnings would be roughly in line with the year-ago’ $5.72.