Media giant Walt Disney Co. posted lower earnings on Tuesday, due in part to the rising costs of acquiring TV sports rights for its ESPN division.
Net income fell 6 per cent to $1.38-billion (U.S.) from $1.46-billion. Net income per share fell 4 per cent to 77 cents a share from 80 cents a share for the company’s fiscal first quarter.
Revenues rose 5 per cent to $11.3-billion from $10.78-billion a year earlier. Wall Street was expecting revenues of $11.2 bln according to Thomson Reuters I/B/E/S.
The company said operating income at its cable networks decreased $15-million to $952-million for the quarter due to a decrease at ESPN, partly offset by growth at its Disney Channel, ABC Family and A&E Television Networks.
Overall, Disney’s media networks, including ABC, saw revenues increase by 7 per cent to $5.1-billion. Segment operating income rose 2 per cent to $1.2-billion, on the strength of ad sales at ABC and its TV stations.
ABC has sold out its advertising for the coming Academy Awards on Feb. 24, Disney chairman and chief executive officer Bob Iger told analysts on a conference call.
He added that he expected the next Star Wars film, to be directed by J.J. Abrams, to be in theatres in the summer of 2015.
The company said its interactive division swung to a profit of $9-million from a loss of $28-million.
“There were no real suprises, although interactive was probably what surprised us the most on the upside,” said David Bank, analyst with RBC Capital Markets.
He said that forecasting Disney’s media networks profits had been the most challenging beforehand. “Media networks was the biggest wildcard,” he said.
Disney’s shares rose 1.7 per cent in after-hours trading. Before the announcement, Disney shares closed up 39 cents to $54.29 cents a share on the New York Stock Exchange.
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