Disney's first quarter earnings drop as ESPN pays more for sports
LOS ANGELES (Reuters) - Media giant Walt Disney Co posted lower earnings on Tuesday, due in part to the rising costs of acquiring TV sports rights for its ESPN division.
Net income fell 6 percent to $1.38 billion from $1.46 billion. Net income per share fell 4 percent to 77 cents a share from 80 cents a share for the company's fiscal first quarter.
Revenues rose 5 percent to $11.3 billion from $10.78 billion a year earlier. Wall Street was expecting revenues of $11.2 bln according to Thomson Reuters I/B/E/S.
The company said operating income at its cable networks decreased $15 million to $952 million for the quarter due to a decrease at ESPN, partially offset by growth at its Disney Channel, ABC Family and A&E Television Networks.
Overall, Disney's media networks, including ABC, saw revenues increase by 7 percent to $5.1 billion. Segment operating income rose 2 percent to $1.2 billion, on the strength of ad sales at ABC and its TV stations.
ABC has sold out its advertising for the upcoming Academy Awards on February 24, Disney Chairman and Chief Executive Bob Iger told analysts on a conference call.
He added that he expected the next "Star Wars" film, to be directed by JJ Abrams, to be in theaters in the summer of 2015.
The company said its interactive division swung to a profit of $9 million from a loss of $28 million.
"There were no real suprises, although interactive was probably what surprised us the most on the upside," said David Bank, analyst with RBC Capital Markets.
He said that forecasting Disney's media networks profits had been the most challenging beforehand. "Media networks was the biggest wildcard," he said.
Disney's shares rose 1.7 percent in after-hours trading. Before the announcement, Disney shares closed up 39 cents to $54.29 cents a share on the New YOrk Stock Exchange.
(Editing by Leslie Gevirtz)