Walt Disney (DIS) earnings and sales disappointed investors after the close Tuesday, sending shares of the media titan downward in extended trade.
XThe analyst call is likely to prompt more questions about the media titan's upcoming direct-to-consumer streaming service (and Netflix (NFLX) rival). Investors will also be looking for an update on ESPN+, the Mouse's streaming sports service.
Estimates: Per-share earnings for fiscal Q3 to grow 25% to $1.97 as revenue rises 9% to $15.49 billion, according to Zacks Investment Research.
Results: EPS of $1.87 on revenue of $15.228 billion, missing views on both the top and bottom.
Disney's media networks segment, which includes ESPN, grew revenue by 5% to $6.16 billion. Parks and resorts revenue rose 6% to $5.19 billion. Higher spending by U.S. park visitors — driven by increases in ticket prices and daily hotel room rates, as well as increased food, drink and merchandise spending lifted operating income.
Studio entertainment revenue saw a 20% pop to $2.88 billion, as Marvel's "Avengers: Infinity War" and Pixar's "The Incredibles 2" buoyed the division.
Meanwhile, sales in the consumer products and interactive media unit declined 8% to $1 billion.
Stock: Shares sank late Tuesday after rising 0.5% to 116.56 in the stock market today, hitting the highest level since November 2015. Recall that the summer of 2015 saw a sector-wide media meltdown after Disney chief Bob Iger disclosed modest subscriber losses at ESPN, prompting concerns about the state of the pay-TV subscriber.
After initially struggling to stay above a 113.29 entry point, Disney shares ultimately broke out in late July and are now trading in buy territory, climbing higher over the last three sessions.
Disney is reportedly spending tens of millions of dollars on original content for its new streaming platform, which is slated to launch in late 2019 and will feature family-friendly content from Disney, Marvel, Pixar and Lucasfilm.
Iger has previously promised four to five exclusive feature films for the service per year, and the New York Times recently reported that nine films are currently in development or production.
Now that shareholders have given Disney's $71.3 billion acquisition of 21st Century Fox's (FOXA) entertainment assets the OK, investors may also be looking for clarity on how Fox's TV and movie properties will be integrated into the Disney universe.
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The post Disney Earnings: A New Netflix Rival Emerges, But Q3 Disappoints appeared first on Investor's Business Daily.
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