Disney profit beats estimate on strength in parks business

Reuters News
Posted: Feb 06, 2018 4:14 PM

(Reuters) - Walt Disney Co, which is buying some of Fox's film and TV units, on Tuesday trounced analysts' estimate for quarterly profit, as strong attendance at its theme parks and resorts helped offset another drop in subscribers at ESPN.

The company's shares rose 1 percent to $107.28 in after-market trading.

Revenue from Disney's parks and resorts business rose 13.2 percent to $5.15 billion, beating analysts' average estimate of $4.87 billion, according to Thomson Reuters I/B/E/S.

Revenue from the company's cable networks business, which includes ESPN and the Disney Channels, rose 1.5 percent to $4.49 billion. Analysts on average had expected $4.51 billion.

Disney's cable division has been under pressure from viewers switching to streaming services such as Netflix Inc and Amazon.com Inc's Prime, or what the industry calls "cord-cutting".

As a counter, Disney said in August it would develop its own streaming services to grab digital viewers who are dumping traditional television. The company is also pulling new movies from Netflix, starting in 2019.

Disney to boost its digital offerings said in December it would buy the film, television and international businesses of Rupert Murdoch's Twenty-First Century Fox Inc for $52.4 billion in stock.

A deal would also give Disney majority control of Netflix rival Hulu, which is also partially owned by Comcast Corp and Time Warner Inc.

Disney has been adding ESPN to smaller, cheaper bundles of channels delivered online in order to reach more consumers.

Net income attributable to the company rose to $4.42 billion, or $2.91 per share, in the first quarter ended Dec. 30 from $2.48 billion, or $1.55 per share.

The media conglomerate recorded a $1.6 billion gain due to recent changes to the U.S. tax law.

Excluding items, it earned $1.89 per share, beating analysts average estimate of $1.61.

Disney's revenue rose 3.8 percent to $15.35 billion.

Analysts on average had expected a revenue of $15.46 billion.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila)