Earnings News

Disney Revenues Miss Estimates as Costs Rise for Its Streaming Venture

Walt Disney posted a steeper earnings fall than Wall Street anticipated on Tuesday as the corporate poured cash into its ambitious dive into streaming media and began folding in assets bought from Twenty-First Century Fox.

Shares of Disney, which had climbed 27% this year and reached an all-time high last week, declined up to 5% in after-hours trading to $135.

Excluding certain products, Disney gained $1.35 per share for the quarter that resulted in June, below average analyst estimates of $1.75 a share, according to IBES information from Refinitiv.

Disney, the owner, and operator of ESPN, a movie studio and theme parks, is investing closely in digital media platforms to challenge the dominance of Netflix.

Its highest digital bet, a family-friendly subscription service known as Disney+, is programmed to debut in November. Shows aimed at adults will be targeting Hulu, which Disney now controls.

The direct-to-consumer and international unit reported a working loss of $553 million from April to June, wider than the $441 million loss analysts had been anticipating, and up from a $168 million loss from a prior year. Costs piled up from consolidation of Hulu and spending on Disney+ and the ESPN+ service, Disney mentioned.

Future digital purchases will result in a roughly $900 million operating loss in the direct-to-consumer unit in the quarter that concludes in September, the corporate said, in contrast with expectations of a $593 million loss.

For the recently ended quarter, executives said Fox’s movie studio performed worse than anticipated.

Arthur Siegrist

By Arthur Siegrist

Arthur has nearly a decade of media experience. Before joining FBI Market News, he ran content operations of several local news journals. He also vast experience stock market, corporate communications, public relations, and digital marketing. Arthur holds a commerce degree from the University of Oakland and a post-graduate degree in English from NYU.

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