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Disney crushes earnings expectations thanks to Star Wars but ESPN profits decline
(© 2014 Lucasfilm Ltd.
Disney reported its best quarterly earnings ever on Tuesday, driven by the success of "Star Wars: The Force Awakens."
The operating income in its studio entertainment segment surged 86% to $1 billion dollars.
However, earnings from cable networks, which had been the focus of investors due to struggles at ESPN, declined 5%.
In after-hours trading, shares of the company were down as much as 4%.
The company posted $1.63 in adjusted earnings per share (EPS) for the first fiscal quarter. Revenue grew 14% to $15.2 billion.
Analysts had expected adjusted EPS of $1.45 and revenues of $14.73, according to Bloomberg.
Disney shares have fallen 9% over the last 12 months. They dropped sharply last August as investors got more concerned that the decline in cable subscriptions was hurting Disney's media business.
Disney's operating income from cable networks fell 5% to $1.2 billion. The company said the drop was due to higher programming costs for NFL and college football games, even though advertising and affiliate revenues increased.
The higher costs of original programming led to losses on Hulu.
The new year celebrations helped boost revenues at Disney's parks and resorts, which rose 9% to $4.3 billion compared to the same quarter in the prior year. The company added that higher labor costs and new services for guests increased costs in this segment.
(Google)
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