Disney revenue misses expectations over weak film earnings

Washington: The Walt Disney Company reported fourth-quarter earnings of $22.5 billion Thursday that missed expectations, taking a hit from a slate of movie releases -- including "The Fantastic Four" -- which failed to energize worldwide audiences.

The entertainment giant's revenues for the quarter ended September 27 were roughly flat compared to the same period last year, sending shares down nearly four percent in pre-market trading on Wall Street.

Despite the revenue headwinds, Disney delivered strong profits in the quarter, driven by record theme park performance and continued growth in its streaming services.

Net income surged to $1.3 billion from $460 million a year earlier.

But analysts were rattled by the entertainment segment, where operating income fell $376 million to $691 million, weighed down by difficult comparisons to last year's blockbuster releases "Inside Out 2" and "Deadpool & Wolverine."

This quarter's slate included "The Fantastic Four: First Steps," "The Roses" and "Freakier Friday," which failed to replicate the massive box office success of the prior year's hits.

Disney's direct-to-consumer business provided a bright spot, with operating income rising $99 million to $352 million.

The company now boasts 196 million Disney+ and Hulu subscriptions combined, adding 12.4 million subscribers during the quarter.

Disney+ alone reached 132 million subscribers, up 3.8 million from the previous quarter, while international Disney+ subscribers grew 4 percent.

Disney's theme parks segment posted record results, with operating income of $1.9 billion for the quarter, up $219 million year-over-year.

Full-year operating income for the parks division reached a record $10.0 billion.

International parks showed particularly strong growth, with operating income rising 25 percent to $375 million, while domestic parks generated $920 million, up 9 percent.