reported third-quarter results significantly short of Wall Street analysts’ estimates on Tuesday, sending shares in the media giant sharply lower in after-hours trading.
Earnings per share came in at $1.35, which was below the $1.74 expected by the street. Total revenue of $20.2 billion undershot the estimate for $21.4 billion. Shares in Disney were off 4% in the early minutes of after-hours trading. They had finished the regular session at $141.95, up nearly 3% for the day. Disney stock has risen nearly 31% in 2019 to date as the company has delivered strong results and also convincingly positioned itself as a legitimate streaming rival to Netflix. In addition to Disney+, which will launch November 12, the company struck a deal with Comcast in May to take operational control of Hulu.
Disney blamed the bumpy quarter on its ongoing integration of 21st Century Fox assets acquired in a $71.3 billion deal that closed in March. It also booked a much wider operating loss in its Direct-to-Consumer and International unit , reflecting the ramp-up of its own streaming outlets and its decision to pull titles off Netflix.
“Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation,” CEO Bob Iger said. “The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings.”
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