Monday, May 8, 2017

Disney Investors Await Update on TV Business

Walt Disney Co. investors will be paying more attention than ever to the media giant’s huge but challenged television business as the company reports fiscal second-quarter financial results Tuesday.

The Wall Street Journal reports the future of Disney’s TV division, particularly ESPN, has long been the focus of anxious Wall Street analysts since its growth started slowing two years ago amid subscription declines for pay-cable packages. Wariness is even higher now, though, after a top executive at Time Warner Inc. last week warned about an advertising slowdown and after the biggest-ever first-quarter decline in pay TV subscriptions.

Investors will want to know whether the many deals Disney has signed with low-price “slim” internet TV bundles like YouTube TV are ameliorating subscriber declines. They also will be looking for an update on the “over-the-top” digital ESPN product Disney has said it would launch by the end of the year.

Disney is expected to report net income of $1.41 a share for the quarter, according to the consensus of analysts surveyed by Thomson Reuters, compared with $1.30 a share a year earlier. Revenue is expected to be $13.45 billion, up from $12.97 billion a year ago. Disney doesn’t provide earnings guidance.

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