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Disney misses revenue expectations as profits jump | Disney misses revenue expectations as profits jump |
(about 1 hour later) | |
Disney posted a 5% increase in revenue for the three months to 27 June - but missed expectations for the first time in eight quarters. | Disney posted a 5% increase in revenue for the three months to 27 June - but missed expectations for the first time in eight quarters. |
Analysts expected the entertainment group's revenues to be $13.2bn (£8.5bn), but the total was $100m less. | |
Operating income fell at Disney's theme parks and resorts outside North America due to higher operating costs at Disneyland in both Paris and Hong Kong. | Operating income fell at Disney's theme parks and resorts outside North America due to higher operating costs at Disneyland in both Paris and Hong Kong. |
The Asian park also had fewer visitors in the period. | The Asian park also had fewer visitors in the period. |
Operating profit at its theme parks rose 9% to $922m, with a 4% increase in revenue to $4.1bn. | Operating profit at its theme parks rose 9% to $922m, with a 4% increase in revenue to $4.1bn. |
Profits at the company's largest unit, media networks, was up 4% to $2.38bn as cable channels brought in higher fees from TV distributors. | Profits at the company's largest unit, media networks, was up 4% to $2.38bn as cable channels brought in higher fees from TV distributors. |
The division includes sports channel ESPN, the Disney channels and the ABC broadcast network. | The division includes sports channel ESPN, the Disney channels and the ABC broadcast network. |
Bob Iger, chairman and chief executive, said the company was very pleased with the third quarter results. Overall, net profit rose 11% to a record $2.48bn. | Bob Iger, chairman and chief executive, said the company was very pleased with the third quarter results. Overall, net profit rose 11% to a record $2.48bn. |
Avengers powers profits | Avengers powers profits |
"The strong results across our many diverse lines of business demonstrate the power of our unparalleled brands, franchises and creative content," he said. | "The strong results across our many diverse lines of business demonstrate the power of our unparalleled brands, franchises and creative content," he said. |
Profits at Disney's movie studio business jumped 15% to $472m, helped by the success of Avengers: Age of Ultron, starring Scarlett Johansson and Robert Downey Jr. | Profits at Disney's movie studio business jumped 15% to $472m, helped by the success of Avengers: Age of Ultron, starring Scarlett Johansson and Robert Downey Jr. |
The Marvel film has taken more than $450m in the US and $940m in foreign markets. | The Marvel film has taken more than $450m in the US and $940m in foreign markets. |
Disney bought the studio in 2009 for what is now thought to have been a bargain $4bn. | Disney bought the studio in 2009 for what is now thought to have been a bargain $4bn. |
The company's consumer products division recorded the biggest rise in profits for the quarter - up 27% to $348m - as merchandise based on Frozen, the Avengers and Star Wars continued to prove popular. | The company's consumer products division recorded the biggest rise in profits for the quarter - up 27% to $348m - as merchandise based on Frozen, the Avengers and Star Wars continued to prove popular. |
Shares in Disney fell 6.5% to $113.85 in after-hours trading on Tuesday. The stock has risen 29% this year, making it the best performer among the 30-member Dow Jones average. | |
The slide accelerated after chief financial officer Christine McCarthy told analysts on a conference call that Disney had scaled back forecasts for profit growth at its media networks unit. | |
She said the company now expected annual growth in the mid-single digits, rather than high single digits, because of lower revenue from fewer cable subscribers and the impact of foreign exchange rates. | |
ESPN had suffered "modest" subscriber losses as some viewers switch to digital platforms, Mr Iger said. | |
Robin Diedrich, an analyst at Edward Jones, said the lowered guidance for the TV unit and the overall revenue miss sparked the share price fall. | |
However, he said that overall Disney had "a good solid quarter". |