Disney beats on earnings and announces a $1 billion deal (DIS)
AP Photo/Ng Han Guan
Disney on Wednesday reported third-quarter revenue and profit that was better than Wall Street had expected.
It also announced that it bought a minority stake in BAMTech, a video-streaming company previously formed by Major League Baseball, for $1 billion.
Disney CEO Bob Iger told CNBC that the acquisition will help jump-start ESPN. It would bring the sports network's content over the top on the internet.
The company will fund the stake in two installments and has the option to buy majority ownership in the coming years, it said.
The company reported adjusted earnings per share of $1.62 and revenue totaling $14.3 billion.
Analysts had forecast that Disney earned $1.61 in adjusted EPS on revenue of $14.16 billion.
Disney's studio-entertainment revenue got a 40% boost to $2.8 billion from titles like "The Jungle Book" and "Cinderella."
Cable-network revenues climbed 1% to $4.2 billion, turning around from a 2% drop in the second quarter, amid higher ad revenue from ESPN. Declines at the Disney Channel and Freeform weighed on this segment of the business.
Disney's theme parks increased their revenues by 6% to $4.4 billion, although operating income was dented by the costs of opening Shanghai Disneyland.
In the second quarter, Disney's profits missed Wall Street's expectations for the first time in five years.
Ad revenue from ESPN fell during the quarter, and the sports network again lost subscribers. But its programming costs were less, helping to boost overall cable revenues.
It was about a year ago that Disney CEO Bob Iger said that ESPN had suffered subscriber losses, and put up a long defense of the network during the quarterly conference call with analysts.
Disney shares have fallen 8% this year. They dropped by as much as 1% in after-hours trading.