Disney’s cable unit fell short of expectations last quarter, hit by the double whammy of lower advertising and affiliate fees along with increased programming and production costs, The New York Post reports.
The cable unit, led by ESPN, announced that revenue fell 2.7% to $13.14 billion.
“The continued struggles of the once indomitable sports cable network resulted in profits, excluding some items, that missed Wall Street expectations,” The Post reports, adding: “Investors started heading to the exits upon hearing the news, as Disney shares lost 3.3 percent in after-hours trading in the minutes after the results were released Thursday.”
Disney execs managed to turn investors’ moods around in a late-afternoon conference call, the report notes. After they touted modest earnings growth that’s expected for 2017 — and even better results on the way in 2018 — share prices reversed course, with The Post reporting they rose 2.5% to $97.53.
“Still, results in the three months ended Oct. 1 were discouraging,” the report notes. “Operating income at the cable unit was off 13 percent, to $1.45 billion, on a 7 percent drop in unit revenue.”