Disney Tops Earnings Estimates Even as Streaming Expenses Mount

(Bloomberg) -- Walt Disney Co. earnings beat analysts’ projections last quarter, a sign the world’s largest entertainment company’s push into streaming isn’t costing as much as some had feared.

Though earnings fell to $1.61 a share in the fiscal second quarter, that was better than the $1.58 that analysts had predicted. Sales also topped estimates in the period, which ended in March.

Key Insights

• In exceeding expectations, Disney overcame some tough comparisons. Its movie studio released “Black Panther” -- the biggest domestic hit of 2018 -- in theaters in the year-earlier period.
• Profits at Disney’s largest business, cable TV, rose 1.6% to $1.76 billion in the quarter, buoyed by rising fees charged to cable distributors, particularly for ESPN. But profit at the ABC network fell, hurt by lower sales of advertising and TV programs.
• Theme-park earnings continued to rise, climbing 15% to $1.51 billion, while the company’s nascent direct-to-consumer streaming business lost $393 million. It plans to launch the Disney+ service, a competitor to Netflix Inc., on Nov. 12.

Market Reaction

• Disney shares rose as much as 2.4% in after-hours trading. They were already up 23% this year, bolstered by optimism about the Burbank, California-based company’s new streaming services.

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