Disney shares fell slightly in post-market trading after reporting mixed results for the first three months of the year, with weaker than expected top-line results at its Media Networks.
The entertainment power generated $2.29 billion in net income, up 11.4% vs. the period last year, on revenues of $13.34 billion, up 2.8%. Wall Street expected the sales number to hit $13.45 billion.
But earnings, at $1.50 a share, beat expectations for $1.41.
“Disney delivered another quarter of double-digit EPS growth, driven by the strong performance of our Studio and Parks and Resorts,” CEO Bob Iger says. “Our continued strong performance is a direct result of our proven strategic focus on great branded content, innovative technology and global growth. We’re pleased with our results in Q2 and remain confident in our ability to continue to deliver significant shareholder value over the long term.”
ESPN Layoffs: Jayson Stark & Trent Dilfer Among Several Big Names Let Go By Sports Giant - Update
Media Networks operating income fell 3% to $2.22 billion with revenues up 3% to $5.95 billion.
Cable — and especially ESPN — weighed on the bottom line, which the company attributes to higher programming costs with a new NBA deal and three additional college football playoffs in the quarter.
Affiliate revenues were up due to higher rates, partially offset by “a decline in subscribers.” Ad sales had a similar story: higher rates but with “lower impressions.”
At the ABC Broadcasting unit, operating income rose 14% to $344 million with revenues up 3% to $1.88 billion. The gain was driven by sales of Iron Fist and How To Get Away With Murder. But they were partially offset by lower ad sales and rising programming costs.
Theme Park operating income improved 20% to $750 million with revenues up 9% to nearly $4.30 billion. Disney says the new Shanghai Disney Resort helped, as did domestic increases in attendance and consumer spending.
The Studio Entertainment operation saw a 21% improvement in the bottom line to $656 million with a 1% drop in revenues to $2.03 billion. Theatrical results were “comparable” to last year with lower costs but also lower revenues vs. last year which benefited from Star Wars: The Force Awakens and Zootopia.
Consumer Products & Interactive Media lagged the other groups with a 3% increase in profits, to $367 million, but an 11% drop in revenues to $1.06 billion. The bottom line was helped by the discontinuation of Infinity console games. But same store sales were down vs last year, which benefited from Frozen and Star Wars merchandise sales.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.