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Blockbusters boost Disney profits but cable revenues fall
[NEW YORK] Strong ticket sales from Star Wars and Zootopia helped modestly lift Disney's second-quarter profit, according to results released on Tuesday.
But revenues from Walt Disney Co's closely-watched cable television division fell, perturbing investors who have been worried about the prospects for its ESPN network as the traditional cable television model comes under assault.
Earnings for the quarter ending April 2 were US$2.1 billion, up about 1.7 per cent from the year-ago period.
Revenues were US$13.0 billion, up 4.0 per cent from the year-ago period.
Strong movie ticket sales lifted operating earnings in the studio entertainment business, up 27 percent to US$542 million.
But revenues in Disney's biggest business, media networks, were flat, with cable television revenues down two per cent at US$4.0 billion.
Analysts fear the erosion of the conventional cable business due to the rise of mobile media and video streaming could harm ESPN, the sports channels that have long been essential to cable television viewer packages and so strong earners.
ESPN earnings rose a bit in the quarter because of lower costs compared with the year-ago period, which included more costs associated with several college football games due to scheduling.
Operating income in parks and recreation was higher, with US results offsetting the hit from higher costs in international parks due to spending associated with the upcoming launch of Shanghai Disney in June.
Disney's earnings translated into US$1.30 per share, below the US$1.40 expected by Wall Street.
Shares of Disney fell 6.4 per cent to US$99.81 in after-hours trade.