Disney Misses Revenue Forecast

Shares of the Burbank, California-based company fell 8.3 percent to $111.54, paring this year’s rally to 18 percent.

Investors have become concerned that Disney’s cable dollars could be in jeopardy because of financial pressures on the bundling of cable channels.

“The increase in volumes was due to attendance growth at our theme parks and higher occupied room nights at Walt Disney World Resort and our Aulani resort in Hawaii”.

Despite the lower revenue, Disney has continued to surprise with strong performance in its largest business segment, media networks, which includes sports channel ESPN, the Disney Channels and the ABC broadcast network. Despite the challenge, the analyst maintained, “Disney is the best positioned amongst its peers with some of the most highly demanded content, and can offset much of these declines with established rate increases and growth in [over-the-top] platforms”. The company had $1.45 in earnings per share (EPS) on $13.1 billion in revenue compared to Thomson Reuters consensus estimates that call for $1.42 in EPS on $13.23 billion in revenue.

Disney said that earnings at cable networks jumped 7 percent to $2.08 billion in the quarter.

The company would not comment on if Disney was being forced to cut recognized talent on its ESPN network such as host Keith Olbermann as its costs increase and its number of subscribers drop.

Earnings in consumer products jumped 27 percent to $348 million, while sales jumped 6 percent to $954 million.

Viacom Inc. shares plummeted 15% after reporting disappointing third-quarter earnings before markets opened on Wall Street. The land is worth about $60 million, the Times reported.

The company’s third quarter included theatrical results from Avengers: Age Of Ultron, the second-highest-grossing domestic film this year, as well as Cinderella, a live-action remake that has taken in nearly $540 million worldwide, according to Box Office Mojo. Parks and Resorts grew revenue 4% from the third quarter of 2014 for a total of $4.1 billion.

This year, Disney is listed as one of the top performing stocks in the Dow Jones Industrial Average.