The Walt Disney Co. reported higher earnings in the calendar first quarter, on strong results at its film and parks business.
Profits were down in Disney’s TV businesses including ESPN, ABC and Freeform.
Net income rose 23% to $2.937 billion, or $1.95 a share, from $2.388 billion, or $1.50 a share.
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Revenue rose 9% to $14.5 billion.
On Disney's earnings call with analysts, CEO Bob Iger declined to speculate on the status of its agreement to buy assets from 21st Century Fox.
"We strongly believe in the value of those assets," Iger said, noting they fit in with the company's plans to build direct to consumer businesses.
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Income at Disney’s media networks unit was down 6% to $2.082 billion.
Revenue at the media networks unit was up 3% to $6.138 billion.
Cable network revenue was up 5% to $4.252 billion, but income was $1.726 billion, down 4% , mainly because of a loss at BAMTech, partly caused by investment in launching ESPN+, and decreases at Freeform and ESPN.
Freeform’s decline was due to lower advertising revenue caused by lower viewership.
The drop at ESPN was cause by higher programming costs. Affiliate and advertising revenue were up. Ad revenue was up 3% thanks to the shift of two college football semifinal games moving into this quarter from the previous quarter a year ago. Disney estimates that shift had a 5% positive impact on ad sales.
In the second quarter, ESPN ad sales a pacing down 1%, CFO Christine McCarthy said during the earnings call.
Broadcasting operating income fell 85% to $13 million while revenue was flat at $1.886 billion. Affiliate fees were up but ad revenue and program sales revenue was down, while programming and marketing costs rose.
In the second quarter, prices for advertising on ESPN were up 27% on a cost-per-thousand viewers basis, McCarthy said.
The company also said losses at Hulu increased, while results improved at A+E Television Networks.
Operating income at Disney’s studio entertainment business was up 29% and parks and resorts rose 27%
“Driven by strong results in our parks and resorts and studio businesses, our Q2 performance reflects our continued ability to drive significant shareholder value,” said Iger.
“Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth,” Iger said.
