Disney Earnings Rise on Box-Office Success

By Tess Stynes 

Walt Disney Co. said its earnings rose 4.6% in the latest quarter, helped by recent box-office hits and the opening of Shanghai Disney in mid-June.

Separately, Disney said it is acquiring a one-third stake in BAMTech, a technology services and video-streaming company formed by Major League Baseball. As part of the deal, BAMTech was separated from MLB's broader digital business, MLB Advanced Media.

Under the terms of the transaction, Disney agreed to pay $1 billion in two installments, now and in January, and has the option to acquire majority ownership in the coming years. BAMTech has nearly 7.5 million total paid subscribers to its clients' over-the-top products.

As for the third quarter ended July 2, Disney said revenue at its film division jumped 40% to $2.85 billion. Results benefited from strong performances from Pixar Animation Studios sequel "Finding Dory," Marvel Studios superhero epic "Captain America: Civil War," the live-action version of "The Jungle Book" and animated animal comedy "Zootopia," all of which offset weak results from the big-budget flop "Alice Through the Looking Glass."

While Disney has had a string of movie hits, analysts have remained focused on Disney's cable-television business. A year ago, Disney disclosed "some subscriber losses" at ESPN, setting off concerns about the future of the sports powerhouse in an era of cable cord-cutting and skinny bundles.

Revenue in Disney's media networks segment increased 2.4% to $5.91 billion. In the segment's cable-network business, which includes ESPN, revenue grew 1.4% to $4.2 billion.

Meanwhile, Disney's parks and resorts segment recorded revenue growth of 6% to $4.38 billion. During the quarter, Disney's newest resort opened to long lines in Shanghai. Also in focus will be any potential impact that the Zika virus and the recent nightclub shooting in Orlando has had on attendance at Disney World.

For the third quarter, Walt Disney reported a profit of $2.6 billion, or $1.59 a share, up from $2.48 billion, or $1.45 a share, a year earlier. Excluding certain items, adjusted per-share earnings rose to $1.62 from $1.45.

Revenue increased 9% to $14.28 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.61 and revenue of $14.15 billion.

The Burbank, Calif., company's shares fell 1.8% to $94.98 in recent after-hours trading.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

August 09, 2016 16:46 ET (20:46 GMT)

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