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Disney Earnings Third Quarter Fell Due To Investment In Streaming Services

Disney Inc. has always beat the expectations of the viewers when it comes to entertainment. While it has fall little below analysts expectations when it came to fiscal third-quarter earnings. The Walt Disney Company shares slipped by 3.7% after the earnings announcement.

Its Studio Entertainment division recorded a 33% increase since last year in the revenue to $3.8 Billion in the quarter. While its Media Networks division revenue surged by 21% to $6.7 Billion. In addition, the company’s Park Unit leaped its revenue by 7% to $6.6 Billion in the quarter.

The California based company said that it missed its target due to the on-going merger of Fox entertainment assets. Disney Inc. bought the company in March for $71 Billion. The Fox Studios is responsible for the longest-running American show ‘The Simpsons’. This move comes after its plan to launch its own streaming service ‘Disney Plus’

Fox Media own shows such as X-men, Modern Family, This Is Us, and many more that will attract the consumers to subscribe to the service. The Media Entertainment company said that it also blames Hulu, ESPN+, and Disney+ for the recurring losses.

During the investors calling day,  Disney Inc. announced that it will launch its bundle of the trio- Disney+, Hulu, and ESPN+ for $12.99/month. This is significantly cheaper then HBO+ which is speculated to be around $16-$17/month.

The direct-to-consumer segment of the company witnessed revenue of $3.86 Billion with the increasing operating losses from $168 Million to $553 Million. Disney CEO Bob Iger during the investor call said that it doesn’t have much content as Netflix but he lauded that the goodwill and strength of the company will lure the customers.

Talking about the remaining quarters, he said that the investment in streaming services will increase the losses up to $900 Million. Disney said that high operating incomes were due to high ad revenues driven by two additional NBA finals games.

Its movies hold a true embodiment of blockbuster over the world. Marvel’s Avenger raked $2.7 Billion around the globe while its other movies such as Aladdin, Captain Marvel, Toy Story, and The Lion King soared the earnings to $9 Billion at the box office.

The company recorded $20.25 Billion in revenue while analysts expected $21.47 Billion in revenue.


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Simon Hemelryk
An innovative and experienced editor and content producer of highly successful, nationally and internationally covered, agenda-setting, print and online material for Reader's Digest, national newspapers, Saga and more. Accomplished team manager and writer. Created and produced numerous brand, PR and revenue-boosting articles, campaigns, advertorials, supplements and guides.