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Star Wars helps Disney to record earnings - but its share price is still down

The success of Disney's first Star Wars film increased the company's net income to $2.9bn in the ...
Newstalk
Newstalk

09.33 10 Feb 2016


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Star Wars helps Disney to reco...

Star Wars helps Disney to record earnings - but its share price is still down

Newstalk
Newstalk

09.33 10 Feb 2016


Share this article


The success of Disney's first Star Wars film increased the company's net income to $2.9bn in the three months to the end of January - up from the $2.2bn recorded 12 months ago.

However, concerns over its cable TV business as an increasing number of consumers 'cut the cord' and abandon pricey subscription services, sent shares down by 3.5%. 

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Its TV business recorded a 5.6% decline in operating income to $1.41bn.

Investor's main concerns relate to a shrinking of ESPN's subscriber base - this has been partially offset by an increase in advertising revenue.

Disney Chief Executive Bob Iger defended the performance of the sports station, "This notion that either the expanded basic bundle is experiencing its demise, or that ESPN is cratering in any way from a subscriber perspective, is just ridiculous," he said, adding that, "Sports is too popular."

As media consumption continues to become increasingly fragmented, high-profile live sports are among the TV events which still draw large live audiences.

"We fully expect our media networks, including ESPN to continue to deliver bottom-line growth, which means ad revenue growth will continue to outpace spending," Mr Iger continued. The company is considering offering a version of the sports station through a slimmed down cable offering.

Star Wars: The Force Awaken's performance at international box offices doubled the company's film studio's operating income to $1.01bn.

Disney theme parks in the US attracted higher crowds, income from the destinations rose by 22% during the quarter, to $981m.


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