The Walt Disney Co. fell short of earnings expectations in part due to weakness at ESPN.
The company earned $1.10 per share on revenue of $13.1 billion in its fiscal fourth quarter, shy of the $1.16 per share on $13.5 billion revenue Wall Street predicted.
The conglomerate's all-important media networks segment, where ESPN resides, was expected to show nearly $5.7 billion in revenue, and it met those expectations. Still, the company said ESPN suffered from lower advertising sales and declining affiliate revenue.
"Lower advertising revenue was primarily due to fewer impressions and lower rates," the company said in its earnings statement.
While movies like "Finding Dory" and "Dr. Strange" were hits, as was the recent opening of its theme park in Shanghai, Disney faced tough comparisons with past quarters that have included the likes of "Frozen" and "Star Wars: The Force Awakens."
The company's studio entertainment segment nonetheless managed 2% revenue growth year-over year to $1.8 billion. But operating income there dropped 28% to $381 million as "Pete's Dragon" and "Queen of Katwe" disappointed at the box office.
Operating income fell across all of Disney's segments during the quarter, in part because there was an extra week reported last year compared to this one. Operating for media networks was off 8% while it dropped 5% at both parks and resorts as well as consumer products and interactive media.
While Freeform, the cable network formerly called ABC Family, was an area of growth for the media networks segment, the Disney Channels were not, due to decreased affiliate revenue and program sales.
In TV broadcasting, "Scandal" and "Nashville" suffered from lower revenue, but revenue from "Luke Cage," "Quantico" and "Golden Girls" was impressive.
Shanghai Disney Resort was a boost to the parks and resorts segment, while weakness at Disneyland Paris and Hong Kong Disney Resort dragged the unit down a bit.
Consumer products and interactive media benefited from products sold related to "Finding Dory," though the segment was hurt from falling sales of "Frozen" gear and the abandonment of the Infinity video game.
-- Bloomberg News