LOS ANGELES _ Walt Disney Co.'s earnings topped Wall Street estimates for the fiscal second quarter, according to numbers released Wednesday, despite a 13 percent dip in profit from a year ago. The company's broadcasting and studio businesses declined, while losses widened at its nascent streaming business.
The numbers:
The Burbank entertainment giant earned $1.61 a share on revenue of $14.9 billion during the quarter that ended March 30. That compared with $1.84 a share on revenue of $14.5 billion during the same quarter last year.
This was better than Wall Street was expecting. Analysts polled by FactSet had estimated earnings of $1.58 a share and revenue of $14.5 billion in the second quarter.
Profit at Disney's media networks business and film studio declined in the quarter, while its theme park business, once again, posted a strong performance. Operating income in the parks and consumer products division grew 15 percent to $1.5 billion.
Operating income at Disney's networks segment, which includes ESPN and ABC, dropped 3 percent to $2.19 billion. An increase at sports cable network ESPN was the result of greater affiliate revenue from rate increases, offsetting a decrease in subscribers.
The company suffered a steep drop in its broadcasting division, which includes ABC. Broadcasting profit plunged 29 percent to $247 million.
The company's movie studio had a major hit in the Marvel Studios film "Captain Marvel," which racked up more than $1 billion in global box office receipts.
But the second-quarter slate couldn't compare to the same period last year, when the company had "Black Panther" and continuing sales from "Star Wars: The Last Jedi." Studio profit was $534 million, down 39 percent from last year's second quarter.
The quarter did not reflect the record-breaking release of "Avengers: Endgame," which hit theaters in late April. "Endgame" has collected $2.27 billion at the box office.
Losses more than doubled at Disney's direct-to-consumer and international business, reflecting the amount of money Disney is spending on new streaming services such as ESPN+ and Disney+. The segment reported a loss of $393 million, compared with $188 million in the year-ago quarter.
The takeaway:
It was the first time Disney reported earnings since the company completed its $71.3-billion purchase of 21st Century Fox Inc. in March. Television station owner Sinclair Broadcast Group Inc. recently agreed to pay Disney $9.6 billion for 21 regional sports networks that regulators required it to unload to win approval of the Fox purchase. The channels were previously part of Fox.
Disney's report included financial information from 11 days of business at the recently absorbed Fox. The unit generated $373 million in revenue and $25 million in operating income during that time.
The report also comes after Disney last month hosted an event for investors to unveil plans for its Disney+ streaming service that will compete with Netflix with loads of the studio's movies and TV shows when it launches in November. It will charge subscribers $6.99 a month.
The outlook:
Disney shares on Wednesday closed at $134.99, up $1.55, or 1.2 percent. The stock has grown 23 percent so far this year.
Iger, on a conference call with analysts, said he was "extremely pleased" with the response to the investor meeting, after which the company's stock hit a record. However, he cautioned that the company isn't resting on its laurels.
"While the initial response to our (direct-to-consumer) efforts has been gratifying, we're not taking anything for granted," Iger said on an analyst call.
Disney last month projected Disney+ will have 60 million to 90 million subscribers and said it doesn't expect the service to be profitable until 2024. Disney is expected to spend big on original programming for the service, which will include the company's movies and shows from brands such as Pixar, Star Wars and Marvel.
Iger on Tuesday said "Avengers: Endgame" would become available on the service on Dec. 11, a month after the launch of Disney+.
Iger also said he expects 20th Century Fox Film, led by Fox executive Emma Watts, to contribute five to six films a year to Disney's movie slate _ much fewer than it made before the acquisition.
Fox's upcoming movies for Disney include the James Mangold-directed drama "Ford v. Ferrari" (Nov. 15) and "The New Mutants," which was delayed until April 2020 as part of a broader shuffling of the company's release schedule. Fox is also preparing multiple "Avatar" sequels, starting in 2021 after numerous delays.
