Thursday 25 / April / 2024
Los Angeles: Walt Disney reported on Tuesday a quarterly profit that beat Wall Street forecasts as theme park crowds made up for declines at broadcast and cable television.
Shares of Disney rose about one per cent in after-hours trading to $107.28. Through Monday, Disney shares had fallen 2.6 per cent this year, compared with 1.5 per cent for the Dow Jones Industrial Average.
The media and entertainment conglomerate reported adjusted earnings per share of $1.89 for October through December, ahead of the $1.61 analysts expected, according to Thomson Reuters I/B/E/S.
The company also announced it had hired the creators of HBO hit "Game of Thrones," David Benioff and D.B. Weiss, to write and produce a new series of "Star Wars" films.
Disney is working to transform itself from a traditional media company into a digital entertainment leader to reach audiences that prefer to watch TV shows and movies online through subscription services such as Netflix.
In December, Disney announced a $52.4 billion deal to buy film, television and international assets from Twenty-First Century Fox, a move that will allow it to offer more programming to online viewers.
Investors have been rattled by the loss of pay TV subscribers to ESPN, Disney's largest network. That trend continued in the quarter, which also was hit by fewer college football games compared with a year earlier. Affiliate revenue for ESPN rose.
Profit at the media networks division fell 12 per cent, mostly due to a decline at ABC, which saw lower advertising revenue and higher production cost write-downs.
To counter the shift to online viewing, Disney will launch a streaming service for sports fans in the spring called ESPN Plus to reach digital audiences, followed by a family entertainment offering in 2019.a.
For the December quarter, Disney reported net income of $4.42 billion and said revenue rose 3.8 percent to $15.4 billion. Analysts on average had expected revenue of $15.46 billion.
The media conglomerate recorded a $1.6 billion gain due to recent changes to the US tax law.
The theme parks division generated $1.3 billion in operating income for the quarter, helped by strong park attendance and cruise ship bookings over the Christmas and New Year's holidays, Disney said.
Disney's movie studio turned out three blockbusters in the quarter. They were "Star Wars: The Last Jedi," "Thor: Ragnarok" and "Coco," but operating income at the studio fell because of lower home entertainment and streaming sales.
Operating income for the studio declined 2 per cent to $829 million, Disney said.
