Disney’s share price falls as profits plummet

Source: Disney/YouTube

Disney missed analyst expectations for the third quarter of the year as profits fell 51% to $1.4bn.

Shares in the entertainment giant subsequently fell 5% in after-hours trading.

This is despite an increase in revenues of 33% to $20.2bn, following the box office success of films including Toy Story 4 and Avengers: Endgame, with the latter becoming the highest grossing film of all time.

Disney’s chairman and CEO, Robert Iger, said the results are a reflection of the company’s efforts to “effectively integrate” the film and TV assets of 21st Century Fox, which it acquired for $71bn in March this year.

Disney is also preparing to launch its new online streaming service, Disney+, in November. According to the BBC, the costs of building the digital service are expected to weigh on profits for several years.

The company’s direct-to-consumer and international unit reported an operating loss of $553m – an increase from its $168m loss a year earlier – as a result of its consolidation of Hulu and spending on Disney+ and the ESPN streaming service.

Rival streaming services from AT&T’s Warner Media and Comcast’s NBC Universal are expected to launch next year.