DIS Walt Disney Co

By Imani Moise 

Walt Disney Co. returned to sales growth after two quarters of declines but profitability was tempered as the media giant works to bolster its television business against declines in cable-TV subscribers.

Sales in Disney's media networks segment, its largest, rose slightly in its first quarter, but its profit plunged 12% as it booked losses on investments in new streaming technologies at BAMTech and Hulu. The segment was helped by a slight increase in cable network revenue and that offset declines in the broadcasting business, which includes ABC networks.

Disney's film-production and consumer-product businesses posted a slight decline in sales as the success of the latest Star Wars movie was not enough to offset a decrease in home entertainment and video-on-demand sales. The company also said Tuesday that it plans to double down on the Star Wars franchise by enlisting Game of Thrones writers and producers to create a new series of movies.

Disney has been investing heavily to keep up with the different ways viewers are consuming content. The company plans to launch its ESPN direct-to-consumer offering, the company's first, later this year. The new streaming sources are designed to provide a new source of revenue and reduce its reliance on licensing fees from third-party distributors.

The company had also agreed to buy most of 21st Century Fox Inc.'s assets late last year for over $52.4 billion. The deal, currently pending regulatory approval, would add Fox's television and film studios, cable networks and regional sports networks to Disney's arsenal of programming.

Disney's theme parks continued to be a bright spot for the company. Parks and resorts revenue climbed 13% to $5.15 billion as guests spent more money at the company's attractions.

Overall for the quarter, Disney reported a profit of $4.42 billion, or $2.91 a share, up from $2.48 billion, or $1.55 a share, a year earlier. The most recent quarter was boosted by a $1.6 billion one-time benefit related to the recently enacted tax law. Excluding certain items including the tax benefit, the company's earnings grew 22% to $1.89 a share.

Revenue rose 3.8% to $15.35 billion.

Analysts polled by Thomson Reuters had forecast earnings of $1.61 per share on $15.45 billion of revenue.

Shares rose 3% to $109.38 in after-hours trading, erasing the 3% decline logged over the past year.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

February 06, 2018 17:29 ET (22:29 GMT)

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