(DIS – Get Report) are retreating by 4.92% to $105.09 on very heavy trading volume on Thursday afternoon, as investors are concerned over the subscriber losses at the company’s ESPN business.
Investors have become concerned that Disney’s cable dollars could be in jeopardy because of financial pressures on the bundling of cable channels. “This guidance cut will not allay any of those fears”. Media Networks contain an array of broadcast, cable, radio, digital and publishing businesses across two departments – the Disney/ABC Television Group and ESPN Inc.
During a conference call with analysts Tuesday, Disney also said it’s now expecting its cable networks’ profit growth to be in the mid-single digits for fiscal 2103 to 2106, down from the forecast of high single digits disclosed in April.
A day after Walt Disney reined in expectations of revenue growth for ESPN and the rest of its cable TV business, its shares were tanking, and most of the other conglomerates were falling in sympathy to the leader in entertainment. Overall, the company produced “a good solid quarter”.
Walt Disney Studios’ operating income rose 15% to $472 million, reflecting the success of “The Avengers: Age of Ultron“, which has generated $1.4 billion at the global box office.
Disney shares fell 2.01 percent to USD119.25 (HKD924.6) in after-hours trading on Tuesday. That beat analysts’ forecasts of $1.41.
The company’s theme parks and resorts outside North America reported a drop in operating income due to higher operating costs in Paris and Hong Kong.
The company’s popular parks and resorts saw revenues go up 4% in the quarter while its media networks increased 5%.
Its media networks unit – which includes ESPN and ABC – accounted for $5.9 billion of Disney’s $11.1 billion in operating income in the nine months to June 27.
Disney said that earnings at cable networks jumped 7 percent to $2.08 billion in the quarter.
Earnings in consumer products jumped 27 percent to $348 million, while sales jumped 6 percent to $954 million. The land is worth about $60 million, the Times reported.