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Disney results miss targets but new Star Wars trilogy raises hopes

Reuters 

By Lisa Richwine and Aishwarya Venugopal

(Reuters) - Co posted disappointing on Thursday due to struggles at television networks and profits falling at its movie studio, but rose after the company announced a new "Star Wars" trilogy in the works.

Chief Executive Bob Iger said 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.

rose about 1 percent from the close after the announcement, following an initial fall-off of the stock when posted

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 at ESPN were comparable to the prior year, said.

Total revenue from Disney's cable business, the largest unit which includes ESPN and the Channel, fell marginally to $3.95 billion in the fourth quarter, missing the $4.06 billion consensus of analysts polled by Thomson I/B/E/S.

Tigress Financial Partners analyst Ivan Feinseth said that concerns about cable subscriptions were weighing on

Iger focused on the power of brands, rather than the quarterly

"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, 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.

also has announced plans for a sports-related service for 2018.

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 more content to compete with Netflix and others.

did not mention the Fox talks on the call with investors.

have had a difficult year, falling roughly 1 percent, while the S&P 500 has risen 15 percent.

recently traded at 16 times expected earnings, compared with 14 times earnings for Time Warner and 13 times earnings for Fox, according to Thomson data.

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.

rose to $104 in trading after the bell. It closed at $102.68.

(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.)

First Published: Fri, November 10 2017. 04:24 IST
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