The Walt Disney Co. reported lower earnings as it worked to absorb assets acquired from 21st Century Fox and ramped up its direct-to-consumer streaming products.
Net income was $1.760 billion, or 79 cents a share, down from $2.916 billion, or $1.95 a share a year ago.
Revenues were $20.245 billion, up 33%.
Operating income for Disney’s Media Networks was up 7% to $2.136 billion. Revenue rose 21% to $6.713 billion.
Cable network operating income was up 15% to $1.637 billion. Cable network revenues rose 24% to $0.464 billion. The increases reflected the addition of FX and National Geographic networks, acquired in the 21st Century Fox transaction. The company said that operating income at ESPN was up with gains in advertising and distribution revenues.
Broadcasting operating income was down 17% to $307 million. Revenue was up 16% to $2.249 billion. Operating income was hurt by decreases in ABC Studio program sales and network advertising revenues.
Disney’s Direct-to-Consumer & International segment reported a loss of $553 million, up from $168 million a year ago. The larger loss was a result of taking on the red ink from Hulu, now consolidated into Disney’s earnings, and investment in ESPN+ and costs associated with launching the Disney+ streaming service.
“Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation,” said chairman and CEO Bob Iger. “I’d like to congratulate The Walt Disney Studios for reaching $8 billion 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. The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings.”