Reuters reports the family entertainment company also revealed plans for a new “Star Wars” video series for its forthcoming streaming service, that it has named Disney+ and plans to launch late next year, aiming to make up for the continuing loss of subscribers from ESPN and other cable networks.
Disney is trying to transform itself into a broad-based digital entertainment company as audiences move to Netflix Inc, Alphabet Inc’s YouTube and other digital options. It is on the verge of gaining new film and television properties in a $71.3 billion purchase of assets from 21st Century Fox Inc.
Overall revenue in the quarter rose 12 percent to $14.3 billion, above analysts’ average estimate of $13.73 billion. Net income climbed 33 percent to $2.3 billion and adjusted earnings per share of $1.48 for beat analysts’ consensus of $1.34.
Shares of Disney, which have gained nearly 8 percent this year, rose 1.7 percent in after-hours trading to $118.
Chairman and Chief Executive Bob Iger said Disney will give a first look at the Disney+ app and its programming at an investor conference in April.
The CEO also was upbeat about the prospects for Hulu, an on-demand and live TV service. Disney will own 60 percent of the streaming service after the Fox purchase, and Iger told CNBC that Disney would be interested in buying the remaining stakes from Comcast Corp and AT&T Inc if they were willing to sell.
Iger said he saw “an opportunity to increase investment in Hulu, notably on the programming side,” and he believed there was room to raise prices.For the just-ended quarter, the media networks unit, Disney’s largest, reported a 4 percent year-over-year rise in operating income of $1.5 billion as broadcaster ABC saw higher program sales and fees from channel distributors.
The ESPN cable network continued to shed subscribers, the company said, as viewing moves to digital platforms.
Disney+ could lift the company’s stock if the streaming service can challenge Netflix and Amazon.com Inc, said Haris Anwar, senior analyst at global financial platform, Investing.com.
In the just-ended quarter, the theme parks division reported operating income of $829 million, an 11 percent increase from a year earlier, as guest attendance and spending at Disney’s U.S. locations rose during the busy summer months.
Profit at Disney’s movie studio more than doubled to $596 million thanks to hits such as “Ant-Man and the Wasp” and “Incredibles 2.”
Its media networks unit was up 9% to $5.96 billion, despite lower advertising revenues. Total cable network revenues were up 5% to $4.1 billion. ESPN revenues were comparable to the prior-year quarter, with gains on affiliate revenue growth. At the same time, that network recorded lower advertising revenue.
Broadcasting -- its TV networks and TV stations -- witnessed 21% more revenues to $1.8 billion. Disney pointed to the higher program sales of two Marvel TV series and the ABC network show “Black-ish.” Also, its TV stations gained in political TV advertising revenues.
Speaking on CNBC, Bob Iger, CEO, Walt Disney said: “Traditional subscriber losses were abated substantially... That growth [from digital multichannel video program distributors] has continued, but we are not getting specific in terms of updating it.”
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