DIS Walt Disney Co

By Maria Armental 

Walt Disney Co.'s acquisition of several key 21st Century Fox properties along with streaming service Hulu drove revenue past $20 billion in the latest period but also cut into profit.

Third-quarter profit in the June quarter fell 40% to $1.76 billion, or 97 cents a share, the company said Tuesday. Excluding charges related to the integration of the Fox properties and other items, profit fell to $1.35 a share from $1.87 a share.

Revenue rose 33% to $20.25 billion.

Analysts surveyed by FactSet projected $1.46 a share, or $1.72 a share as adjusted, on $21.45 billion in revenue.

The results for the June quarter, the first full quarter that included operating results from Hulu and the former Fox properties, showed expenses outpaced revenue growth as the company ramps up investments in content and technology, including a high-stakes bet on streaming.

Expenses rose 55% to $17.49 billion,

Disney's stock, which closed up 2.6% for the day, fell 3% to $137.25 in after-hours trading.

The entertainment giant, which began in 1923 as a cartoon studio, now controls three streaming services and lucrative properties such as "The Simpsons," "Avatar," "Star Wars" and Marvel Studios.

The direct-to-consumer and international division -- which includes the ESPN+, Disney+ and Hulu streaming services -- saw revenue more than double to $3.86 billion. The operating loss in the segment was $553 million, compared with $168 million a year earlier, which Disney attributed to the Hulu consolidation and spending ramp-up in ESPN+ and Disney+.

Meanwhile, media networks -- which includes ABC, Disney Channel, ESPN and other stations and remains the main profit driver -- saw revenue rise 21%. Operating income in that segment rose 7%, driven by the Fox properties, primarily FX and National Geographic networks, Disney said.

Revenue at Disney's studio entertainment division, which oversees its theatrical releases, surged 33% while operating income rose 13%.

The theme-parks division saw revenue increase 7% and operating income increase 4%.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

August 06, 2019 17:01 ET (21:01 GMT)

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