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Disney profit tops estimates; parks, studio hold back sales

Profit in the quarter rose to $1.20 a share.
Walt Disney, which triggered a selloff in media stocks three months ago with a warning about subscriber losses at ESPN, reported fourth-quarter profit that beat analysts’ estimates as cable and film profits rose. Revenue fell short of analysts’ estimates.

Profit in the quarter rose to $1.20 a share, excluding items, Burbank, California-based Disney said Thursday in a statement, beating the $1.14 average of 28 analysts’ estimates. Sales rose 9.1% to $13.5 billion in the period ended Sept. 30. That compared with estimates of $13.6 billion. Some analysts were expecting slightly higher revenue from the company’s parks and film divisions.

The results follow reports this week from Time Warner and 21st Century Fox that reignited investor fears that the pay-TV industry is losing ground to lower-cost streaming services such as Netflix Inc. Media stocks tumbled, as they did in August when Disney cut the long-term profit growth forecast for cable networks including ESPN. This time, cable networks were the bright spot.

Disney has been cutting costs, most notably at its ESPN sports networks, which eliminated almost 300 jobs last month. The company also introduced DisneyLife, a $15-a-month online service in the U.K. that shows archived children’s movies and TV shows. Disney has said it plans to expand that in Europe.

Profit at the company’s cable networks increased 30% to $1.66 billion, Disney said, while revenue advanced 12% to $4.25 billion.

Disney was little changed at $112.30 in extended trading after the results were announced. The stock fell 0.2% to $113 at the close in New York and has gained 20% this year.

©2015 Bloomberg News

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