Disney dips as Q3 earnings disappoint

Disney disappointed with third quarter results, despite strong earnings growth driven by strong studio growth from new Marvel movies and Pixar’s 'Incredibles 2'.

The House of Mouse reported revenues down 7% year on year to $15.2bn, just short of the $15.3bn expected by Wall Street analysts, as per FactSet.

Net profit for the third quarter of 2018 was $2.9bn up 23% from $2.3bn earned in the same period of 2017.

Earnings per share of $1.87 were up 18% from $1.58 in the same period last year, but could not beat expectations of $1.95 per share.

The company's shares dipped 2% in after-hours trade after the results were released but just after Wednesday's open were down less than 1% to $115.56.

Disney’s studio revenue rose 20% year over year to $2.88bn driven by the strong box office performances.

Disney’s media and networks rose to $6.16bn, better than the $6.10bn expected, though parks and resorts such as Disney World did not reach the estimated $5.28bn and stood at $5.19bn.

Disney’s results come as the entertainment arm is in the middle of acquiring most of Twenty-first Century Fox’s assets. In July both sides approved the $71.3bn cash and stock deal to combine Disney with Fox’s film and TV studios, including the rights to successful content such as X-Men, Avatar, The Simpsons and National Geographic. The move is designed to boost Disney’s new direct-to-consumer streaming service to be launched in 2019.