Walt Disney reignited the fears of jittery media investors with second-quarter results that missed analysts' estimates as profit from the ABC broadcast operation fell and the company shut down its Infinity video-games division.
Profit excluding some items totalled $1.36 a share, compared with a projection of $1.40.
It was the first shortfall against analysts' projections in five years, according to data compiled by Bloomberg.
Disney shares fell 4.7 per cent to $101.62 in extended trading. The results renewed investor concern over the outlook for broadcast and cable television companies, which have lost viewers and advertising dollars to online media.
Chief Executive Officer Robert Iger is making deals to carry channels like ESPN on online-streaming providers such as Sling TV to make up for declining subscriptions through traditional cable.
"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.”
While ESPN kept losing subscribers in the quarter, the network’s profits rose because it has been able to demand higher fees from its distributors.
The AandE cable networks, in which Disney owns a stake, had smaller profits than a year earlier because of lower ad sales and higher spending on programming designed to make the channels essential for cable operators to maintain in their line-ups.
Overall, profit at the company’s cable networks rose 12 per cent, in part because ESPN spent less on programming.
Red hot studio business
Those results overshadowed a big showing by Disney’s red-hot film studio, where profit grew 27 per cent to $542 million, with revenue advancing 22 per cent, on the wings of “Star Wars: The Force Awakens” and “Zootopia”.
The movie business is likely to lift Disney's results throughout the year, with "The Jungle Book" and "Captain America: Civil War" performing well in the current quarter.
Total sales grew 4 per cent to $13 billion in the period ended April 2nd, compared with the $13.2 billion average projection.
