Walt Disney Co. posted second-quarter results that missed analysts' estimates as earnings fell at the company's ABC TV network and the strong dollar cut profit from "Star Wars" merchandise. The company said it will shut down its Infinity game division, and the stock tumbled.
Profit excluding some items totaled $1.36 a share, Disney said Tuesday in a statement. Analysts were projecting $1.40 a share, the average of estimates compiled by Bloomberg. Sales grew 4% to $13 billion in the period ended April 2, compared with the $13.2 billion average projection.
The closing of Infinity resulted in a $147 million expense as Disney wrote off its investment in the games business and recorded expenses for job cuts. Infinity combined computer or console game play with collectible figurines. The closing marks a retreat from the company's efforts to make console games on its own.
Earnings from consumer products slumped 8% to $357 million. At Disney's TV networks, cable profit led by ESPN increased 12% to $2.02 billion on lower revenue. Broadcast profit fell 8% to $278 million because of higher programming and marketing costs. Profit at the film division grew 27% to $542 million, with revenue advancing 22%. Theme-park profit advanced 10% to $624 million. The company's new Shanghai park opens on June 16.
"The miss by the media networks segment plays upon investors concerns for this stock," said Paul Sweeney, a Bloomberg Intelligence analyst. "If the pay-TV bundle is fraying and affiliate fees are at risk, then Disney may be the most exposed since ESPN is the highest priced cable network."