Credit: Shutterstock photoWalt Disney ( DIS ) fell notably short of revenue forecasts, posting a surprise decline, as Sports Illustrated reported that over 100 more layoffs are set to take place at ESPN after Thanksgiving.
[ibd-display-video id=2326990 width=50 float=left autostart=true]But a slew of breaking news on the conference call helped reverse the stock's late laggard action on Thursday, as Chief Executive Bob Iger announced the launch of a brand new "Star Wars" trilogy, said the new Disney-only streaming platform would be priced "substantially below" Netflix ( NFLX ), and gave the new ESPN direct-to-consumer service a name: ESPN Plus.
Though analysts no doubt had some major questions, chief among them, "What's going on with the reported talks to buy the bulk of 21st Century Fox ( FOXA )?", Disney management would only say that it does not comment on press speculation.
The Mouse disappointed analyst forecasts for growth to $1.12 in per-share earnings on revenue of $13.15 billion, unexpectedly reporting 3% declines on both the top and bottom lines to $1.07 in earnings per share, excluding items, on $12.78 billion in revenue.
Shares initially sank, then reversed higher for a 0.8% gain in late trading in the stock market today , after ending the regular session up 1.5% to 102.68. Disney had logged a solid rise going into earnings, prompted by a CNBC report Monday that 21st Century Fox had held now-inactive talks to sell most of itself to its larger media peer.
Iger offhandedly unloaded a number of juicy bits of breaking news, telling those on the call that Disney had struck an agreement with "Star Wars: The Last Jedi" director Rian Johnson for a new three-picture deal. Johnson will write and direct the first of the new "Star Wars" trilogy, said Lucasfilm.
The new Disney-only streaming platform, which is set to rival Netflix when it rolls out in 2019, will feature Disney, Pixar and Marvel content for a total of "thousands" of hours of content, he said.
Netflix shares dipped slightly late after closing down 1.3% to 193.90. Fox, which had reportedly held talks to sell most of itself to the House of Mouse, rose 2.2% Thursday, adding to its big weekly gain after reporting solid quarterly results late Wednesday.
The upcoming ad-supported ESPN Plus service will launch in the spring, announced Iger, adding that Disney will discuss pricing at a later date.
Some analysts have argued that Disney's studio hits and theme parks are enough to offset weakness at ESPN. Operating income from Disney's Media Networks segment, which houses ESPN, dropped 12% to $1.475 billion as subscribers and average viewership declined.
But Studio Entertainment Q4 operating income skid even more sharply, dropping 43% year over year. Consumer Products & Interactive Media fell 12%, while Parks and Resorts rose 7%.
Only the theme parks segment topped operating income expectations, according to CNBC, citing StreetAccount estimates.
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Disney took some heat this week for its decision - then reversal - to ban Los Angeles Times film critics from press screenings after the outlet's investigative unit published an expose on Disney's contributions to the city of Anaheim , where Disneyland is located. Critics groups banded together to boycott Disney films in response . Disney nixed the blacklisting on Tuesday.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
