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By Lisa Richwine and Aishwarya Venugopal
(Reuters) - Walt Disney Co posted disappointing results on Thursday due to struggles at television networks and profits falling at its movie studio, but shares rose after the company announced a new "Star Wars" trilogy in the works.
Chief Executive Bob Iger said Disney had struck a deal with Rian Johnson, director of the upcoming "Star Wars: The Last Jedi," to create a new trilogy of the science fiction blockbuster.
"The Last Jedi" is the second movie in the current trilogy, and the deal assured fans and investors it would not be the last.
Subscribers and advertising revenue fell at ESPN, the sports powerhouse that is seen as a proxy for Disney's ability to fight back against so-called cord cutting. Affiliate revenue rose and overall results at ESPN were comparable to the prior year, Disney said.
Total revenue from Disney's cable business, the largest unit which includes ESPN and the Disney Channel, fell marginally to $3.95 billion in the fourth quarter, missing the $4.06 billion consensus of analysts polled by Thomson Reuters I/B/E/S.
Tigress Financial Partners analyst Ivan Feinseth said that concerns about cable subscriptions were weighing on Disney.
"No other entertainment company is better equipped to navigate the ever-evolving media landscape," he said in a statement.
Disney's television networks have been under pressure as audiences rapidly embrace online streaming services and ditch traditional pay TV packages. Sports channel ESPN, Disney's biggest network, has lost subscribers at the same time its programming costs are rising.
To navigate the changes, Disney plans to launch its own online offerings. The company said in August it was pulling its new movie releases from Netflix Inc starting in 2019 to create its own streaming service centered around family entertainment, and Iger on Thursday said the new service would be priced "substantially below" Netflix.
Disney also has announced plans for a sports-related service for 2018.
Disney also held talks in recent weeks about buying some of Twenty-First Century Fox's film and TV businesses, according to media reports, which could bring Disney more content to compete with Netflix and others.
Disney did not mention the Fox talks on the call with investors.
Disney's movie business generated revenue of $1.4 billion in the quarter, down about 21 percent and missing analysts' average estimate of $1.61 billion. Broadcast revenue of $1.51 billion missed Wall Street's target of $1.69 million, and Disney's theme parks posted revenue of $4.67 billion, just missing expectations of $4.70 billion.
Disney's total revenue fell to $12.78 billion in the quarter ended Sept. 30 from $13.14 billion a year earlier.
Net income attributable to the company declined to $1.75 billion from $1.77 billion.
Excluding items, it earned $1.07 per share.
Analysts on average had expected an adjusted profit of $1.13 per share and revenue to rise to $13.23 billion.
(Reporting by Lisa Richwine in Los Angeles and Aishwarya Venugopal in Bengaluru; Editing by Peter Henderson, Savio D'Souza and Lisa Shumaker)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)