Yahoo Finance Disney smashes expectations, reveals name of new streaming service
Shares of Disney (DIS) climbed after the entertainment giant posted quarterly results that beat on both the top and bottom lines.
Earnings per share came in at $1.48 on an adjusted basis on revenue of $14.31 billion, soaring past estimates of earnings of $1.34 per share on revenue of $13.74 billion, according to Bloomberg data. Adjusted EPS beat the highest analyst estimates of $1.45.
Disney shares rose 2.92% to $119.39 each as of 9:38 a.m. ET Friday following the results.
Disney+
“We’re very pleased with our financial performance in fiscal 2018, delivering record revenue, net income and earnings per share,” Robert Iger, Chairman and CEO, said in a statement. “We remain focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business.”
Disney is planning to launch a dedicated streaming service in late 2019, pitting it against the likes of Netflix (NFLX), Amazon Prime Video (AMZN) and AT&T (T), which also recently announced it would be launching digital video service by the end of next year. The new service will be called Disney+ and will include exclusive content including a new Marvel series and Star Wars “Rogue One” prequel series starring Diego Luna, Iger said during a call with investors Thursday.
In September, Disney said ESPN’s streaming service had signed up more than one million subscribers since launching in April. The service offers live viewing of Major League Baseball and National Hockey League games along with college football and soccer matches.
Disney’s Media Networks unit, which includes cable and broadcast, saw quarterly revenues climb to $5.96 billion, beating expectations of $5.69 billion. This segment – the largest division for the entertainment conglomerate – had also jumped in the previous quarter.
Disney’s Studio Entertainment segment delivered revenue of $2.15 billion, surging past consensus estimates of of $1.8 billion and growing 50% year-over-year.
For Disney’s Park and Resorts, revenue hit $5.1 billion for the quarter. Attendance at domestic parks rose 4%, and per capita spending was up 9% on higher admissions, food and beverages and merchandise spending, CFO Christine McCarthy said during a call with investors.
This is the first earnings report for Disney after it lost a bid for control of European streaming company Sky to Comcast. With the Sky deal in the past, analysts were looking to this earnings report for Disney to provide details on its plans for 21st Century Fox, which Disney announced it would acquire late last year. Iger told investors Thursday that he’s optimistic the $71 billion deal will close well before June.
By acquiring Fox’s assets, Disney also doubled its stake in Hulu. Iger said in an interview with CNBC Thursday that he’d be interested in purchasing the rest of the streaming company’s shares if Comcast or Warner Media decided to divest their stake.
Shares of Disney were up about 8% for the year-to-date as of market close Thursday.
Updates with opening share prices on Friday.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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