Walt Disney Co. reported a 3 percent increase in fiscal fourth-quarter sales that trailed analysts’ estimates after film revenue and ABC network advertising fell.
Sales at the world’s largest entertainment company rose to $10.8 billion, compared with the average projection of $10.9 billion, based on 25 estimates compiled by Bloomberg. Net income increased 14 percent to $1.24 billion, or 68 cents a share, in the quarter that ended Sept. 29, Burbank, California-based Disney said Thursday in a statement. That matched predictions.
The film division saw declines in revenue and operating income, driven by a decrease in worldwide theatrical results and higher film writedowns, while ABC’s ad sales dropped because of lower ratings. Disney joins companies including Time Warner Inc. in reporting disappointing advertising in the calendar third quarter, according to Paul Sweeney, an analyst with Bloomberg Industries.
“Revenue came in light due to weaker-than-expected third- quarter advertising revenue on both broadcast and cable TV networks,” Sweeney said.
Shares of Disney, also owner of the ESPN cable-TV network, declined 2.4 percent to $48.85 in aftermarket trading Thursday. They have jumped 33 percent this year.
Ad sales at ABC fell because of lower summer ratings and the Olympics, while advertising on Disney’s cable channels was “relatively OK,” Chief Executive Officer Robert Iger said.
“The trends we are seeing going forward are good,” Iger said in an interview on Bloomberg Television. “We’re ultimately going to deliver a solid year.”
Disney agreed to buy “Star Wars” owner Lucasfilm Ltd. for $4.05 billion on Oct. 30, a deal that furthers Iger’s pursuit of marquee content in an era marked by technology changes.
Services such as $8-a-month video streaming and free game downloads have disrupted Hollywood’s traditional revenue sources. Iger, who paid a combined $11.2 billion for Pixar and Marvel, has said memorable characters will be valuable no matter what medium they appear in.
Disney paid $7 billion for animation studio Pixar in 2006 and bought Marvel Entertainment in 2009 for $4.2 billion, adding the creators of “Toy Story” and “The Avengers” to the company’s library.
Net income in the year-earlier quarter was $1.09 billion, or 58 cents.
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