WALT DISNEY BLAND
Park gate up 1%
Rising theme park ticket and food prices weren’t enough to offset increased costs at Disney during the second quarter — helping to produce adjusted earnings per share that missed Wall Street expectations.
Disney, which has been pushing up prices at its theme parks in recent years, saw the latest price hike lead to a slim 1 percent gain in US theme park attendance in the period — down from an 8 percent increase last year — while hotel occupancy rates dropped to 86 percent from 88 percent.
In the Mouse House’s media networks division, which includes ESPN and ABC, operations eked out a 3 percent gain in total revenue but higher programming fees, including for the NBA, resulted in a 6 percent decline in operating profit.
ESPN’s highly profitable operation has been under pressure in recent years as consumers cut the cord and flock to such streaming services as Netflix and Amazon Prime video.
In order to compete with those services, Disney is acquiring Twenty-First Century Fox’s film and entertainment assets — and it is developing a streaming service that will incorporate Disney and Fox content.
The streaming service is set to launch in 2019 with several programs, including a “liveaction version” of “Lady and the Tramp,” as well as a live- action “Star Wars” series directed by Jon Favreau that will cost about $100 million for 10 episodes.
The second-quarter results released Tuesday were the first since Comcast dropped out of the bidding for the Fox assets.
US regulators approved the deal in May. Other countries are still studying the deal.
Chief Executive Bob Iger touted the benefits of Disney’s $71.3 billion acquisition of Fox’s assets, emphasizing the importance of the Star Wars and Sky pay-TV assets.
Comcast is still locked in a bidding war with Fox for control of Sky, the UK satellite TV distributor.
Overall in the quarter, Disney reported net income rose 23 percent, to $2.92 billion, or $1.95 a share. Adjusted earnings per share totaled $1.87, less than the Street’s expectation of $1.95.
Revenue rose 7 percent, to $15.23 billion — also missing forecasts.
Elsewhere, Disney’s studio and entertainment division saw a 20 percent boost in sales, to $2.88 billion, due mainly to the success of “Avengers: Infinity War” and “Black Panther.”
Operating profits in its consumer products unit, the smallest division, slipped 10 percent on an 8 percent drop in revenue — due mainly to lower licensing revenue from “Spider-Man” and “Cars.”
Disney shares slipped $1.06 in after-hours trading, to $115.50.