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Disney misses forecasts as it readies Netflix rival

Credit: Reuters Studio
Published on August 7, 2019 - Duration: 01:28s

Disney misses forecasts as it readies Netflix rival

Walt Disney Co.

Reported a steeper earnings decline than Wall Street expected on Tuesday as the company poured money into the streaming media business it is building to challenge Netflix.

Jillian Kitchener has more.

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Disney misses forecasts as it readies Netflix rival

There were no Wall Street fireworks for Disney Tuesday when the company reported a steeper-than-expected earnings decline.

Shares of the Walt Disney Company - which hit an all-time high last week — dropped 5% in after-hours trading.

Weighing on profits: the cost of digital media platforms like the upcoming family-friendly subscription service Disney+, set to debut in November.

Executives said investments in digital would weigh on the company for years to come as it looks to compete not only with Netflix, but upcoming streaming competitors from AT&T’s WarnerMedia and Comcast’s NBCUniversal.

Other losses were related to its integration of 21st Century Fox, a deal it completed earlier this year.

Fox’s film studio performed worse than expected while sports rights in certain markets were higher than anticipated.And while operating income at its theme parks rose overall, it declined at Disney’s US parks, partly due to lower attendance.

But as media companies go, it’s still among the happiest places on earth.

Disney’s networks units - which includes ESPN and FX - unit reported a 7% increase in operating income.

And the highest-grossing movie of all time — “Avengers: Endgame” boosted its movie studio profit, as did hits “Toy Story 4” and “Aladdin”.

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