Disney ended 2016 beating Wall Street’s earnings expectations, but apparently not doing well enough to outweigh a disappointing number on its top line.
The entertainment giant generated $2.48 billion in net income, down 13.9%, on revenues of $14.78 billion, down 3.0%. Analysts thought they’d see $15.26 billion. This was Disney’s fiscal first quarter.
But earnings at $1.55 a share topped forecasts for $1.50.
Disney shares are down 1.9% in initial post market trading after the report.
CEO Bob Iger says he’s “very pleased with our financial performance in the first quarter. Our Parks and Resorts delivered excellent results and, coming off a record year, our Studio had three global hits including our first billion-dollar film of fiscal 2017, Rogue One: A Star Wars Story. With our proven strategy and unparalleled collection of brands and franchises, we are extremely confident in our ability to continue to drive significant value over the long term.”
At the ESPN-led Cable Networks unit revenues fell 2% to $4.4 billion while operating income dropped 11% to $864 million. The sports network saw ad sales drop as it grappled with the general decline in NFL viewing during the regular season, and the move of three college football championship games to the current quarter.
Broadcasting, which includes ABC, benefited from political ad sales at the company owned stations although the overall ad sales number was flat when you factor in the network’s declining ratings.. Operating income was up 28% to $379 million with revenues essentially flat at $1.81 billion.
Studio Entertainment saw profits drop 17% to $842 million with revenues down 7% to $2.52 billion. Theatrical revenues fell compared to late 2015, which included Star Wars: The Force Awakens. Home entertainment also declined compared to late 2015 which included Avengers: Age of Ultron and Inside Out.
Parks and Resorts stood out, in part due to the inclusion of Shanghai Disney Resort, which opened last summer. Profits were up 13% to $1.11 billion on revenues of $4.56 billion, up 6%. At the domestic parks prince increases helped to offset lower attendance, due in part fo the impact of Hurricane Matthew which forced Walt Disney World Resort to close for a day and a half.
Consumer Products & Interactive Media took it on the chin compared to last year, which benefited from sales of merchandise tied to Frozen as well as Star Wars. Profits fell 25% to $642 million with revenues down 23% to $1.48 billion.