Strong box office performance has lifted Walt Disney Co.’s second-quarter results but failed to meet Wall Street forecasts, sending shares sharply lower.
Disney shares tumbled some 5% in after-hours trade after reporting profits fell 51% to $1.4bn while revenues rose 33% to $20.2 billion.
The results included the recently acquired film and television assets from 21st Century Fox, which gives Disney a dominant share of the Hollywood box office as it looks to boost its share in on-demand television to compete with Netflix and Amazon, AFP reported.
Bob Iger, chief executive, Disney said: “Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation.
“I'd like to congratulate The Walt Disney Studios for reaching $8bn at the global box office so far this year - a new industry record - thanks to the stellar performance of our Marvel, Pixar and Disney films.”
Recent box-office hits such as ‘Avengers: Endgame,’ ‘Aladdin,’ ‘Captain Marvel’ and ‘Toy Story 4’ played a part in lifting revenues to a healthy 33%.
The latest ‘Avengers’ film smashed records this year to become the all-time top grossing film with more than $2.8 billion by July.
Disney also included results from Hulu, the online streaming service in which it acquired a controlling stake with the Fox deal.
Disney, which also operates theme parks and the ABC and ESPN television networks, is focusing on streaming as it gears up for the launch of its Disney+ service.
Its ‘direct to consumer’ revenues rose in the past quarter from $827m to $3.8bn, but its operating loss more than tripled to $553m due to its investments and consolidation of streaming operations.