Disney Beats Earnings Expectations, Falls Short on Revenue
ESPN Plus, the conglomerate's upcoming streaming product, will launch in the spring at $4.99 per month, CEO Bob Iger said Tuesday.
In Walt Disney's first quarterly financial report since announcing a blockbuster deal to purchase most of 21st Century Fox, the conglomerate said Tuesday that it earned more than Wall Street expected even as revenue fell just shy of expectations.
Disney said it earned an adjusted $1.89 per share, while Wall Street was expecting it to post $1.61 per share in its fiscal first quarter. Revenue was $15.35 billion, while analysts expected $15.48 billion.
During a conference call Tuesday to discuss earnings, Disney CEO Bob Iger said that ESPN Plus, its upcoming streaming product, will launch in the spring at $4.99 per month. It will offer live streaming of the various ESPN networks as well as more coverage of Major League Baseball, soccer, the National Hockey League, college sports, tennis, golf, rugby and cricket.
Parks and resorts appeared to be Disney's strongest segment in the most recent quarter, with revenue up 13 percent and operating income up 21 percent.
Media networks saw flat revenue and a 12 percent decline in operating income as ESPN ad sales were weaker than expected. Falling political revenue at the company's owned TV stations also didn't help the media networks segment.
The film studio saw a 1 percent drop in revenue and 2 percent fall in operating income, with part of the problem being lower home-entertainment unit sales of Cars 3 in the just-ended quarter compared with Finding Dory a year earlier.
Consumer products and interactive media reported a 2 percent decline in revenue and 4 percent fall in operating income even as the conglomerate's video-games business did well with licensing revenue from Star Wars Battlefront II.
Shares of Disney rose 1 percent during regular trading on Tuesday and advanced another 3 percent after the closing bell when its earnings results were revealed.
Iger raved about the $52.4 billion deal for much of Fox, saying he has met with top executives there and sees lots of synergies.
On the film side, while Star Wars: The Last Jedi recently fell short of some expectations, Pixar's Coco and Marvel's Thor: Ragnarok have done well. Disney's Marvel also should expect big things from Black Panther, which opens Feb. 16. During the conference call on Tuesday, Iger said "the buzz is palpable" for Black Panther and added, "We're thrilled with the attention and accolades."
Minutes before Disney released its financial results, it announced that Game of Thrones creators David Benioff and D.B. Weiss will write and produce a new series of Star Wars films. That series will be separate from the trilogy that director Rian Johnson is developing and also separate from what J.J. Abrams is doing with Star Wars.
Iger said that a streaming service to be released in late 2019 with Disney, Pixar, Lucasfilm and Marvel content will include some Star Wars shows with "rather significant" talent attached, though he said he couldn't be specific until after deals are inked.