Walt Disney Co. reported better-than-expected quarterly profit and revenue, fueled by a 40 percent jump in revenue at its movie studio from hits such as The Jungle Book and Captain America: Civil War, Reuters reports.
The media company also said it was acquiring a 33 percent stake in BAMTech, a video-streaming company formed by Major League Baseball, for US$1 billion.
Disney has the option to acquire a majority ownership in the coming years.
BAMTech, which is separate from Major League Baseball’s content business, will be used to help build out Disney’s streaming video efforts, including the launch of a multi-sport ESPN subscription streaming service.
However, the service will not include any of the content that appears on ESPN’s TV networks, Disney said.
Like other media companies, Disney, owner of the ABC network, has been hit by “cord-cutting”, the switch to streaming services from cable and satellite TV.
Revenue in Disney’s cable networks business rose 1.4 percent to US$4.20 billion in the third quarter ended July 2.
That was slightly below the US$4.31 billion consensus forecast of analysts, according to FactSet.
ESPN, the company’s cash cow, outperformed in the quarter due to affiliate and advertising revenue growth, but number of subscribers fell and it had higher programming costs, Disney said.
In the same period a year earlier, chief executive Bob Iger warned that ESPN was weighed down by “modest” declines in subscribers, as they moved to cheaper digital platforms.
At the movie studio, revenue increased 39.6 percent to US$2.85 billion, helped by a string of successful hit movies. Operating income at the studio rose 62 percent to US$766 million.
Revenue at its theme park and resorts business was up 6 percent to US$4.38 billion.
The net income attributable to the company rose to US$2.6 billion, or US$1.59 per share, in the third quarter, from US$2.48 billion, or US$1.45 per share, a year earlier.
Revenue rose to US$14.28 billion from US$13.10 billion.
Excluding items, the company earned US$1.62 per share.
Analysts on average had expected a profit of US$1.61 per share and revenue of US$14.15 billion.
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