The company's studio entertainment revenue showed impressive revenue gain, up 33 percent to $3.8 billion due to 'Avengers: Endgame,' 'Captain Marvel' and 'Toy Story 4.'
Disney shares were falling more than 4 percent after the closing bell on Tuesday after the entertainment giant's quarterly earnings fell short of expectations. "Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation," Disney CEO Bob Iger said.
He singled out the Fox film and TV studio as an under-performer. The company's studio entertainment revenue showed impressive revenue gain, up 33 percent to $3.8 billion due toIger noted that Disney has already set an annual box-office record with five months remaining and releases such asstill to come this year. The film studio is "the envy of the industry," he said Tuesday. Overall, Disney revenue came in at $20.3 billion for its fiscal quarter while analysts expected $21.4 billion. Adjusted earnings were $1.35 a share while analysts predicted $1.71. Disney's direct-to-consumer segment showed a $553 million loss, up from $168 million in the same quarter last year, as it gets ready to launch Disney+ in November. That product, expected to heavily feature Marvel, Pixar and Star Wars content, will compete with Netflix, Amazon Prime Video, CBS All Access and other streamers. At launch, Disney+ will have about 600 hours of Nat Geo content and 300 hours of Fox content, due to its $71 billion acquisition of 21st Century Fox, Iger said on Tuesday. He also said Disney is readying a far-reaching marketing plan for Disney+, adding that to call it "comprehensive is probably an understatement." He added that Disney+ is one of the most important products the company has ever launched. Also on Tuesday, Disney said it will bundle Disney+, ESPN+ and Hulu's basic tier for $12.99 monthly, while it had previously disclosed that Disney+ alone will cost $.6.99 per month. Disney's losses at its DTC segment also reflect costs associated with its majority stake in Hulu and its increasing investments in ESPN+. Disney said Tuesday that it could rack up $900 million in operating losses in the DTC segment in the current quarter. The media networks segment saw revenue increase 21 percent to $6.7 billion, though ESPN again showed lower viewership, a trend for a few years now as consumers ditch pricey cable and satellite TV services in favor of less expensive streamers.As is usually the case, media networks was the most profitable segment for Disney, with operating income rising 7 percent to $2.1 billion. Parks, experiences and products was second, rising 4 percent to $1.7 billion while studio entertainment was up 13 percent to $792 million.
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