Disney Shares Fall on Disappointing Q3 Results

Shares of Disney were heading lower on Tuesday after the company reported third quarter financial results that missed on earnings and revenue.

Shares were down as much as 3.7% in extended hours.

For the third quarter, Disney reported earnings per share of $1.35. Analysts had been expecting $1.75 according to Refinitiv estimates. Revenue at $20.25 billion was also below the $21.47 billion expected according to Refinitiv.

Disney cited the ongoing integration of Fox’s entertainment assets which it spent $71 billion to acquire. The deal had closed this past March.

The company’s Studio Entertainment segment reported revenues of $3.8 billion during the quarter, which was a jump of 33% compared to the year ago quarter. The Media Networks unit reported revenue of $6.7 billion, a 21% jump from the same quarter one year earlier. The company’s Parks unit posted revenue of $6.6 billion during the quarter, a 7% jump from the third quarter of 2018.

Disney also reported that direct-to-consumer segment saw revenue of $3.86 billion during the period. Operating losses increased to $553 million from $168 million, which Disney cited was due to increased losses on Hulu and increased investments in ESPN+ and Disney+ streaming services.

The company’s streaming platform Disney+ is expected to launch in November for $6.99 a month.

CEO Bob Iger said the company will offer U.S. consumers a bundle of Disney+, ESPN+ and an ad-supported Hulu subscription for $12.99 per month. This bundle will launch alongside Disney+ on Nov. 12.

“The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings,” said Iger.

Disclaimer: We have no position in Walt Disney Co. (NYSE: DIS) and have not been compensated for this article.