Walt Disney Co (NYSE: DIS) released their third quarter earnings report yesterday after the market closed, and showed mixed performance. The media giant has posted a record profit but missed Wall Street’s revenue estimates, implying a possible growth slowdown. As a result company shares have plummeted more than 7% in after-hours trading.
Walt Disney reported net income of $2.48 billion for the third quarter, which is an increase of 11% from last year. As for revenue, the company reported $13.1 billion, below the $13.23 billion estimated by Wall Street. This is the first time is two years (8 quarters) that Disney reported results below estimates.
Disney has a significant part of its business operations overseas, and the weaker euro has impacted revenue streams from the Disneyland Paris Park by approximately $100 million.
Despite the lower revenue, Disney has continued to surprise with strong performance in its largest business segment, media networks, which includes sports channel ESPN, the Disney Channels and the ABC broadcast network. Operating income of the media networks segment showed an increase of 4 % this quarter. This is the result of cable channels collecting higher fees from pay TV distributors. The segment has been a concern of some analysts as more and more customers are cutting the chord, canceling their cable services and moving to services like Netflix (NASDAQ: NFLX) or Amazon (NASDAQ: AMZN).