According to Reuters, The storied movie studio and theme park operator is scrambling to keep viewers who are abandoning its current top money maker, cable networks. The power of its characters and brands are the reason many investors stick with the company despite its challenges.
Disney shares rose more than 1 percent after Chief Executive Bob Iger said Disney had struck a deal with Rian Johnson, director of upcoming film “Star Wars: The Last Jedi,” to create a new trilogy in the blockbuster science fiction series.
A live-action “Star Wars” TV series also is being developed for a streaming service that Disney is launching to capture online audiences, Iger said.
Disney shares rose about 1 percent from their Thursday closing price to $103.57 after the “Star Wars” announcements, reversing an initial falloff after Disney’s results raised concerns about cable subscriptions.Subscribers and advertising revenue both fell at ESPN, the sports powerhouse that is seen as a proxy for Disney’s ability to fight the rapid migration of audiences to online viewing. Affiliate revenue rose and overall results at ESPN were comparable to the prior year for the quarter that ended in September, Disney said.
Total revenue from Disney’s cable business, the largest unit which includes ESPN and the Disney Channel, fell marginally to $3.95 billion in the fourth quarter, missing the $4.06 billion consensus of analysts polled by Thomson Reuters I/B/E/S.
A two-day closing of Disney’s Florida resorts amid a hurricane and the cancellation of an animated movie were among one-time items that reduced operating income by about $275 million, or about 11 cents per share, the company said.
Disney’s movie business generated revenue of $1.4 billion in the quarter, down about 21 percent and missing analysts’ average estimate of $1.61 billion. Broadcast revenue of $1.51 billion missed Wall Street’s target of $1.69 million, and Disney’s theme parks posted revenue of $4.67 billion, just missing expectations of $4.70 billion.
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