By Mae Anderson, Business Writer
NEW YORK (AP) --Disney is feeling some pain from its biggest transformation in decades as its acquisition of Fox's entertainment businesses contributed to a 39% drop in earnings.
CEO Bob Iger said one of the biggest issues affecting earnings was underperformance at the Fox movie and TV studio. Tuesday's results, the first complete quarter with Fox's businesses included, missed Wall Street's expectations. Disney's shares fell 3% in aftermarket trading.
The Fox studio was "well below where we hoped it would be when we made the acquisition," Iger said during a conference call with analysts.
Particularly underperforming was "Dark Phoenix," a Fox X-Men movie that failed to find its audience. That offset box office successes such as "Avengers: Endgame."
Disney completed its $71 billion acquisition of Fox's entertainment business in March, putting "Cinderella," ?The Simpsons," ?Star Wars" and "Dr. Strange" under one corporate roof. The deal paved the ways for Disney to boost its streaming ventures, with the addition of Fox videos. In May, Disney also gained full control of Hulu after Comcast sold its stake in the streaming service.
Iger said it would be two years before Disney can have an impact on the Fox films in production.
"We're all confident that we're going to be able to turn around the fortunes of Fox live action and you'll see those results in a couple of years," he said.
Disney also spent more money on its ESPN Plus and upcoming Disney Plus streaming services. And its results were hurt by taking control of Hulu, including a $123 million charge as it lowered its estimated valuation of the service.
Disney said Tuesday that it will offer its three streaming services in a package for $13. Hulu now costs $6, and ESPN Plus costs $5. The upcoming Disney Plus service will cost $7. So the package will represent a $5 savings. Disney is making the package available Nov. 12, the same day Disney Plus is launching.
Disney is turning to its own streaming services to compete with Netflix as people drop traditional cable services, and Disney loses revenue from its ESPN and traditional channels.
Iger said Disney Plus won't have as much video as rivals such as Netflix might have, but it will have quality, including launching with eight "Star Wars" movies, 18 Pixar movies, 70 Disney animated movies, 240 Disney live action movies and 7,500 episodes of Disney TV. The service will launch with four Marvel movies, with eight more to come during its first year.
For the fiscal third quarter, which ended June 29, net income fell to $1.76 billion, from $2.92 billion last year. Excluding one-time items, income totaled $1.35 per share. Earnings from continuing operations fell to $1.44 billion, or 79 cents per share. Analysts surveyed by FactSet expected net income of $1.72 per share.
Revenue rose 33% to $20.2 billion from $15.2 billion, short of the revenue of $21.4 billion analysts expected.
“Scandal” cast will reunite for online script reading for hurricane relief in western North Carolina
The cast of ABC's hit political drama "Scandal" may need to brush up on their snappy, speedy delivery known as "Scandal-pace," because they're reuniting for a good cause. Its stars including Kerry Washington, Tony Goldwyn and Bellamy Young will take part in a live virtual script reading on Nov. 17 to raise money for hurricane relief in western North Carolina.
Beginning Friday, fans can go online and donate to reserve a spot for the online reading. Proceeds will benefit United Way of North Carolina. Everyone who donates will be able to take part in a virtual pre-event with the cast and Shonda Rhimes will give an introduction.
Additional guest stars will also be announced. The online fundraising platform Prizeo is also holding a contest where one person who donates online via their site will be selected to read a role from the script with the actors. The winner should not worry about the "Scandal"-pace, assured Young over Zoom.
"Whomever the lucky reader is can read at whatever pace they want," she said.
Young, who played Mellie Young, the first lady and later Republican presidential nominee on "Scandal," was born and raised in Asheville, North Carolina. She came up with the idea for the effort with a friend and took it to her fellow "Scandal" actors, who all jumped on board. Young said this is the first script reading the cast has all done together since the show ended after seven seasons in 2018.
Which episode they will be reading has not been announced yet.
Young said it's "been devastating" to see so many parts of her hometown badly damaged by Hurricane Helene, which ravaged western North Carolina one month ago.
To research the best use for donations, Young spoke with numerous political leaders, including North... Read More