Disney record Q3 profits, cuts guidance

The drop was sparked by Tuesday night’s second-quarter report, which beat Wall Street’s earnings targets (as usual) but also delivered a rare miss against top-line revenue estimates. Time Warner stock fell nearly 9%, or $7.85, to $79.80 a share on Wednesday.

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.

Interactive revenues fell by $58 million to $208 million.

The company’s popular parks and resorts saw revenues go up 4% in the quarter while its media networks increased 5%.

The company said that it expects annual operating income growth for the unit in the mid-single digits through fiscal year 2016, down from its previous forecast for growth in the high single digits. The segment has been a concern of some analysts as more and more customers are cutting the chord, canceling their cable services and moving to services like Netflix (NASDAQ: NFLX) or Amazon (NASDAQ: AMZN).

During Disney’s earnings conference call CEO Bob Iger noted that ESPN suffered “some subscriber loss” sparking the selloff.

For the period ended June 27, Disney reported a profit of $US2.48 billion ($A3.36bn), or $US1.45 a share, up from $US2.25bn, or $US1.28 a share, a year earlier.

In management’s earnings comments it specifically discussed losses in its ESPN business which attributed to the third quarter’s lower revenue results in Media Networks. While ESPN and other Disney-owned cable channels have pushed to develop streaming options, their key revenue source – payments from pay-TV providers based on the number of subscribers – continues to trigger doubts among analysts as the cable subscriber universe dwindles.

Over on the print side, New York Times Co (NYSE:NYT) has given up 3.4% to trade at $12.74, after the firm reported lackluster revenue and declining print ad sales.

Earnings in consumer products jumped 27 percent to $348 million, while sales jumped 6 percent to $954 million. The stock had risen 29 percent this year, making it the best performing among the 30-member Dow Jones industrial average this year.