The Walt Disney Company (DIS), a media and entertainment conglomerate, reported late on Tuesday second-quarter results that missed the market’s forecast for revenue and earnings, as an increase in total costs and expenses exceeded a jump in group sales.
Sales at the Burbank, California-based group surged by 33% to $20.25 billion during the three months that ended June 29, from $15.23 billion a year ago, but still missed the $21.4 billion average analyst estimate compiled by Capital IQ.
Earnings per share from continuing operations plunged by 59% to $0.79 from $1.95 a year earlier and excluding certain items affecting comparability, earnings still slumped by 28% to $1.35 per share from $1.87 per share in the prior-year period. The market consensus was for unadjusted earnings of $1.45 per share and normalized earnings per share of $1.74, implying a miss on both accounts.
Profit failed to offset costs in the quarter as the company released films such as Aladdin and Avengers. Total costs and expenses soared by $6.18 billion to $17.49 billion, outpacing the $5.02 billion increase in sales due in part to the jump in programming and production costs at ESPN, higher costs and lower volume at domestic parks.
Disney, which bought in March the TV and film assets of 21st Century Fox and, as a result, ended up owning 60% of Hulu, recently announced a new digital streaming service which is expected to be unveiled in November to challenge the dominance of Netflix (NFLX).