Walt Disney Co. shares increased on Thursday as the promise of a new Star Wars film trilogy overshadowed low quarterly results and problems at the media company’s television business.
In the quarter ended Sept. 30, Disney’s total revenue declined to $12.78 billion from $13.14 billion the previous year. Net income attributable to the company also fell from $1.77 billion to $1.75 billion. It earned $1.07 per share, in exception of items.
On average, analyst expectations showed an adjusted profit of $1.13 per share and revenue to jump to $13.23 billion.
Shares of Disney rose more than 1 percent after Bob Iger, Disney Chief Executive had made a deal with director of upcoming film “Star Wars: The Last Jedi”, Rian Johnson, in order to create a new trilogy in the world of the blockbuster science fiction series.
Iger disclosed that a live-action “Star Wars” TV is being developed for a streaming service that Disney is working on in an attempt to attract online audiences.
The rise in Disney shares closed to the price of $103.57 after the “Star Wars” announcements, reversing the previous decline after Disney’s results raised concerns regarding cable subscriptions.
Total revenue from Disney’s cable business, the biggest unit including ESPN and the Disney Channel, missed the $4.06 billion consensus of analysts and dropped marginally to $3.95 billion in the fourth quarter.
Disney Streaming Services
Disney is developing streaming services for the general rated audience that will sell directly to consumers, competing with Netflix Inc. and other competitors. This is to address struggles in its TV network business, building the company’s agenda of businesses tops for next year.
“We believe creating a direct-to-consumer relationship is vital to the future of our media businesses, and it’s our highest priority this year,” Iger said.
Starting 2019, new Disney releases will go to the company’s own service rather than Netflix and according to Iger, the said service would be “substantially below” the Netflix price, a sign of having less content.
While the S&P 500 has risen 15 percent, Disney shares struggled this year, falling about 1 percent.
In the recent weeks, Disney also held discussions about acquiring shares from Twenty-First Century Fox’s film and TV businesses, according to media reports. This could mean bringing Disney more content to compete with Netflix and other rivals.
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