The Walt Disney Co.’s fiscal fourth-quarter earnings were disappointing, with ESPN and the cable networks group reporting lower operating income.
Net income rose 10% to $1.8 billion, or $1.10 per share, from $1.6 billion, or 95 cents per share a year ago. But operating income was down at all of the company’s operating segments, including media networks, parks and resorts, and studio entertainment. Those results we hurt by the fact that there was one more week in the year ago quarter.
Revenues fell 3% to $13.1 billion.
The figures were below Wall Street expectations, a rare miss for Disney.
“We’re very pleased with our performance for the year, delivering the highest revenue, net income and earnings per share in Disney’s history,” said CEO Bob Iger. “We remain confident that Disney will continue to deliver strong growth over the long-term as we further strengthen our brands and franchises, our technological capabilities, and our international presence.”
Disney’s media networks group reported operating income of $1.7 billion in the quarter, down 8% from a year ago. Media group revenue was down 3% to $5.7 billion.
The company said media network income was hurt by decreases at ESPN and the Disney Channels. Broadcasting operating income was up 37%, as revenues rose 8%.
ESPN's lower income stemmed from lower advertising and affiliate revenue, plus higher programming and production costs. Advertising impressions and rates were both lower. Impressions were hurt by having one less week during the quarter than a year ago. Lower affiliate revenue reflected a decline in the number of subscribers, offset somewhat by higher rates.
Disney Channel also had lower affiliate income because of the shorter quarter.
Operating income at broadcasting, which includes the ABC network and owned stations, was up 37% to $224 million because of higher program sales from shows, including Luke Cage, Quantico and Golden Girls, and an increase in affiliate revenue. Revenue rose 8% to $5.7 billion. Advertising revenue was down.
Equity losses because of Hulu rose.