On the heels of a disappointing box office haul for Solo: A Star Wars Story and in the midst of trying to close a blockbuster deal to acquire most of 21st Century Fox, the Walt Disney Co. on Tuesday posted earnings per share of $1.87 on revenue of $15.2 billion, which disappointed Wall Street.
Disney was expected to earn $1.95 per share after certain items on revenue of $15.4 billion. Disney shares were up 1 percent in the regular session Tuesday but dropped 3 percent after the closing bell.
When Disney CEO Bob Iger spoke to Wall Street after the earnings were released Tuesday, he focused not only on the Fox deal but also the upcoming Netflix-like service that is in the works.
20th Century Fox gives Disney “opportunity” like “Avatar, Marvel’s X-Men, Fantastic Four, Deadpool, Kingsman, Planet of the Apes,” and many other franchises Iger said on the call.
He also noted that the studio will explore possibilities for these properties with both big and small screen endeavors as Disney’s streaming service becomes a major focus.
More details regarding those plans were promised for future conference calls.
“The assets we’re buying fit perfectly with our plan to substantially grow our portfolio,” Iger said. “FX is renowned for great high quality television. Our plan is to provide even more resources to further FX’s existing business.”
Iger mentioned other networks the studio will acquire. “National Geographic is another tremendous brand built on quality, one that has global reach and cross generational appeal,” he said, disclosing that Disney is looking to expand and provide resources to the network. There are also “new, exciting opportunities in the eco-tourism space,” through National Geographic.
Iger then turned to Fox Searchlight, a studio he confirmed would continue on with business as usual:
“With 20 Oscar nominations last year, along with the Academy Award for best picture,” Iger said of Fox Searchlight, “our strategy is to allow to continue to allow the studio to do what it does best.”
Meanwhile, investors who were hoping the ESPN Plus digital streaming service would shore up ESPN might have been disappointed, since the leader in televised sports again lost TV subscribers, though it managed to grow revenue in the third fiscal quarter because of affiliate fee increases.
While the latest Star Wars film earned $391 million worldwide, it’s an underachiever compared to others in the franchise, but Disney’s recent film slate also includes Black Panther, Avengers: Infinity War and Incredibles 2, which helped the studio post $2.9 billion in revenue, up 20 percent from a year ago.
Disney media networks grew revenue 5 percent to $6.2 billion, parks and resorts grew revenue 6 percent to $5.2 billion while consumer products and interactive media saw revenue decline 8 percent to $1 billion.
Broadcast television was strong due to higher sales for Designated Survivor, How to Get Away with Murder and Grey’s Anatomy.
“Having earned the overwhelming support of shareholders, we are more enthusiastic about the 21st Century Fox acquisition than ever,” Iger said.
Iger said the Disney streaming service will launch before the end of 2019 though it won’t have anything “close to the volume of Netflix” in terms of content because Disney is “going to walk instead of run.”
He said the upcoming product “is the biggest priority of the company during calendar 2019.” He said he’s reaching out to “Disney consumers, Disney aficionados all over the world” seeking their input.
“The first priority is reaching the core Disney fan and we certainly have a number of different company touch-points to do that,” Iger said of the yet-to-launch streaming service.