UPDATED: Disney ended its fiscal year with a thud in Wall Street’s eyes, with September quarter numbers coming in below analysts’ expectations — but with an explanation. The company says that last year’s fiscal Q4 had one more week than this year’s.
Shares initially dropped more than 3% in post-market trading. The price picked up after CEO Bob Iger — in a conference call with analysts — said he’s “bullish” about ESPN’s prospects. The stock is now up nearly 2.8%.
The entertainment giant generated $1.77 billion in net income, up 10.1% vs the period last year, on revenues of $13.14 billion, down 2.7%. Analysts expected the top line to hit $13.52 billion.
Adjusted earnings at $1.10 a share missed expectations for $1.16.
CEO Bob Iger says he’s “very pleased with our performance for the year,” and is “confident that Disney will continue to deliver strong growth over the long-term as we further strengthen our brands and franchises, our technological capabilities, and our international presence.”
Cable Networks, which include ESPN, were partly responsible for the earnings miss. Operating income fell 13% to $1.45 billion while revenues dropped 7% to $3.96 billion. The sports network had “lower advertising and affiliate revenue and higher programming and production costs,” Disney says.
The woes included “a decline in subscribers.”
The ABC-led Broadcasting unit offset some of that: Its operating profits rose 37% to $224 million with revenues up 8% to $1.70 billion. But much of the increase was due to program sales. The operation grappled with “higher programming costs, lower advertising revenue and an increase in equity losses from Hulu.”
Parks and Resorts also missed Wall Street expectations with operating income down 5% to $699 million on $4.39 billion in revenue, up 1%. The company says that attendance and occupied room nights fell at Disneyland Paris, while attendance fell at Hong Kong Disneyland Resort.
In the U.S. lower attendance at Disneyland Resort weighed on guest spending growth at Walt Disney World Resort.
The Studio Entertainment operation struggled with disappointing sales for Pete’s Dragon and Queen Of Katwe while last year’s quarter included Inside Out, Ant-Man, and Avengers: Age Of Ultron. Total operating income fell 28% to $381 million while revenues increased 2% to $1.81 billion.
Disney helped its cause with TV and SVOD sales of classic Star Wars movies.
And Consumer Products & Interactive Media dealt with the discontinuation of its Infinity console games, which had Infinity 3.0 last year. Last year also benefited from Frozen merchandise. Operating income fell 5% to $424 million with revenues down 17% to $1.29 billion.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.