The Walt Disney Co. reported lower profits in its fourth fiscal quarter as revenues and income from its media networks dropped.
Net income fell 1% to $1.747 billion, or $1.13 per share, from $1.771 billion, or $1.10 a share, a year ago.
Revenue fell 3% to $12.779 billion.
Operating income for Disney’s media networks unit, which includes ABC and ESPN, was down 12% to $1.475 billion. Revenue was down 3% to $5.465 billion. Affiliate revenue was up due to higher rates, but subscribers were down 3%.
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The company said operating income was lower because of rate increases for sports programming, lower advertising revenue and bigger losses from investment in BAMTech and Hulu and a drop in income from A+E Networks.
Operating income for Disney’s cable networks was down 1% to $1.236 billion because of a decrease at Freeform, where lower viewership resulted in lower ad revenue. Disney Channel income was up because of higher program sales.
ESPN was flat. Higher programming costs and lower ad revenues were offset by higher affiliate revenue. Ad revenues were down by low single digits. For the current quarter, ad revenus are tracking lower, because of the timing of college football games and competition from more football on other netowrks.
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Broadcast income was down 15% to $229 million, as revenue fell 11% to $1.514 billion. Programming costs were down and affiliate revenue was up. But ad revenues and program sales were lower. ABC impressions were lower, and revenue was down despite an increase in ad units sold. ABC’s stations had lower political ad revenues.
“No other entertainment company is better equipped to navigate the ever-evolving media landscape, thanks to our unparalleled collection of brands and franchises and our ability to leverage IP across our entire company,” said CEO Bob Iger. “We look forward to launching our first direct-to-consumer streaming service in the new year, and we will continue to invest for the future and take the smart risks required to deliver shareholder value.”
