(Reuters) - Walt Disney Co’s (DIS.N) quarterly profit topped Wall Street forecasts on Tuesday as higher returns from its theme parks and film studio offset ongoing pressure on the television business from digital competition.
Shares of the media conglomerate, which is in the process of buying film and TV assets from Twenty-First Century Fox Inc (FOXA.O), slipped 0.5 percent to $101.23 in after-hours trading.
So far this year, Disney shares have dropped 5.3 percent, more than the 0.1 percent for the S&P 500 Index .SPX.
The owner of ESPN, the Disney Channels and ABC is trying to transform itself into a leader in digital entertainment as younger viewers abandon traditional television packages for streaming platforms such as Netflix Inc (NFLX.O).
Net income in the media networks unit, Disney’s largest division, fell 6 percent to $2.1 billion as ESPN continued to lose subscribers. The results also were hurt by investments in streaming technology company BAMTech, which was moved into the cable unit after Disney acquired a controlling stake to help its digital push.
Disney reported adjusted earnings per share of $1.84 from January through March, compared with the $1.70 per share that analysts expected, according to Thomson Reuters I/B/E/S.The theme park unit reported net income of $954 million, up 27 percent as attendance and guest spending rose. Disney raised some single-day admission prices in February.
Chief Executive Bob Iger, on a conference call with analysts, said the company would consider expanding its parks business in China and other markets.
“It doesn’t necessarily mean that we’re going to build something anytime very soon, but we’re going to look,” he said.
At the movie studio, profit hit $847 million thanks largely to the success of superhero movie “Black Panther.” The film from Disney’s Marvel Studios has exceeded expectations with $1.3 billion in global ticket sales, making it the ninth-highest grossing film in movie history.
In the meantime, Disney is attempting to close a $52 billion bid for film, TV and international businesses from Fox. The deal is under regulatory review and has been complicated by U.S. cable operator Comcast Corp’s (CMCSA.O) bigger offer for one of the businesses, Britain’s Sky Plc (SKYB.L).
Comcast also may make a play for all of the Fox assets that Disney wants, sources have told Reuters. The cable company has been speaking to investment banks about obtaining bridge financing for an all-cash bid of those businesses, three people familiar with the matter said on Monday.
The Fox purchase is designed to bring in more programming to help attract streaming audiences.
In an interview on CNBC, Iger said he remained confident the Fox deal would go through.
Reporting by Lisa Richwine in Los Angeles and Laharee Chatterjee in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker