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Disney posts lower-than-expected profit as ad sales decline

May 12 '16 | By La Afrique Media | Views: 171 | Comments: 0

This week in business, Cineplex reports fourth-quarter results, giving investors a chance to see how much "Star Wars: The Force Awakens" boosted the movie theatre chain's box-office and concession sales. (CP Video)

Walt Disney Co reported smaller-than-expected quarterly profit and revenue, hurt by lower ad sales in its media business which includes sports network ESPN and the Disney channels.

The company’s shares fell 6.19 per cent in extended trading on Tuesday.

Revenue in the cable networks business fell 1.86 per cent to $3.96-billion in the second quarter ended April 2.

However, operating income in the division rose 12.34 per cent, mainly due to lower programming costs and higher fees from pay TV distributors.

Disney and other media companies have been hit by the trend of “cord-cutting” as younger viewers increasingly opt for streaming services over cable and satellite TV channels.

Studio revenue for the quarter increased 22 per cent to $2.1-billion, powered by the box-office success of “Star Wars: The Force Awakens” and animated movie “Zootopia”.

“Zootopia”, about a rabbit who joins the police force, was Disney’s biggest debut weekend animation launch in 2016, raking in $73.7-million in its first weekend.

Revenue in the company’s theme park business rose 4.5 per cent to $3.9-billion.

The net income attributable to company rose to $2.14-billion, or $1.30 per share, in the second quarter ended April 2, from $2.11-billion, or $1.23 per share, a year earlier. Excluding items, the company earned $1.36 per share.

Revenue rose to $12.97-billion from $12.46-billion.

Analysts on average had expected profit of $1.40 per share and revenue of $13.19-billion.

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