Disney results fall short of expectations, as Fox bid nears
NEW YORK (AP) - Disney's earnings grew in the latest quarter, but results missed expectations, as the company paid more for NBA sports rights at ESPN and saw lower licensing revenue from "Spider-Man" and "Cars."
Shares fell 2 percent in aftermarket trading. The fiscal third-quarter results come as Disney plans to move forward with its $71.3 billion purchase of Fox's entertainment assets, in part to boost a Disney-branded streaming service set to launch in 2019. The Fox bid was approved by shareholders last month. Comcast has dropped out of the bidding.
Disney CEO Bob Iger said he was excited about "opportunities ahead for continued growth."
Net income rose 23 percent to $2.92 billion, or $1.95 per share, from $2.37 billion, or $1.51 per share, a year ago. Excluding one-time items like a benefit from lower federal tax rates, income was $1.87 per share. The average estimate of four analysts surveyed by Zacks Investment Research was for adjusted earnings of $1.97 per share.
Revenue rose 7 percent to $15.23 billion in the period, short of the $15.49 billion expected by four analysts surveyed by Zacks.
Revenue from the movie and TV production business jumped 20 percent to $2.88 billion, boosted by a strong box office for "Avengers: Infinity War" and "Incredibles 2." Disney's television networks also saw gains, including at ESPN, despite the higher NBA costs and lower advertising revenue.
The one business that saw a drop in revenue was also Disney's smallest segment, Consumer Products and Interactive Media. Gains in products related to the Avengers weren't enough to offset lower revenue from "Spider-Man" and "Cars"
Disney shares have risen slightly more than 8 percent since the beginning of the year, while the Standard & Poor's 500 index has risen almost 7 percent. In the final minutes of trading on Tuesday, shares hit $116.56, an increase of almost 10 percent from a year ago.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DIS at https://www.zacks.com/ap/DIS