Drop in Disney profits, but ‘Force’ is strong in first quarter

Walt Disney Company's first-quarter profit rose, beating analysts' estimates as the December hit Star Wars: The Force Awakens boosted the film studio and consumer-products business. Earnings at the ESPN sports network, closely watched by investors, declined and the shares fell.

Profit rose to $1.63 a share Disney said Monday in a statement, exceeding the $1.45-a-share average of analysts’ projections compiled by Bloomberg. Revenue grew 14 per cent to $15.2 billion (€13.5 billion) in the period ending January 2nd, compared with estimates of $14.7 billion.

Profit at Disney’s TV networks, including ESPN, fell 6 per cent to $1.41 billion on lower ratings, higher program costs and subscriber losses, along with the strong dollar.

Theme-park profit grew 22 per cent to $981 million on attendance gains and net income rose 32 percent to $2.88 billion, or $1.73 a share ESPN posted lower earnings as programming costs rose. The network aired more college playoff games in the period, pushing expenses up.

Extended trading

Disney fell 3.4 per cent to $89.19 in extended trading after the results were announced. The shares gained 0.2 per cent to $92.32 at the close in New York and have fallen 12 per cent this year.

The studio division, with two straight years of record profit, has picked up some of the slack from Disney’s media networks, which have registered slowing growth yet still contribute more than half of profit.

Disney cut its growth forecast for the cable business last August, leading to a drop in the stock and the shares of other entertainment companies. The Force Awakens was released on December 18th, meaning the bulk of its $2 billion in global ticket sales occurred after the quarter ended.

The movie was the top-grossing film in US history and third-largest worldwide, according to researcher Box Office Mojo. The film division has thrived on features from the Marvel and animation businesses.