Beacon Transcript – The Disney Empire which has been magical both for children and for its investors seems to be losing steam as the company announced falling numbers in its third quarter reports.
One would not exaggerate when saying that Disney built an actual empire around its name as the various domains in which it was involved, from cable properties to theme parks, have brought in rising numbers.
Under the current CEO, Bob Iger, the Disney empire registered a stock rise of 335 percent in between Iger’s March 2005 appointment and the company’s stock peak last year.
After having come to their highest value of $125 per share last year, the Mouse House has been registering constantly falling numbers, with stocks losing up to a fifth of their value.
As the company announced its third quarter year reports on Thursday, the decreasing trend seems to have been confirmed as Disney failed to meet market estimates for a second time in just three quarters.
The Disney empire reported a total revenue value of $13.1 billion with $1.10 earnings per share and fell short of the Wall Street average estimates of a $13.5 billion revenue and $1.16 earnings per share.
The difference in numbers and the failure to meet expectations is an even bigger hit when taking into consideration the fact that the Mouse empire used to regularly beat surpass market estimates.
The apparent main culprits of Disney house’s fall seem to be the company’s cable networks and its own Disney channel television, in contrast with its broadcast networks for example, ABC, which marked a rise.
As the cable networks have been known to make up for almost half of the Disney operating profit, the ESPN and Disney channel revenue decrease of 7 percent and operating income drop of 13 percent do not spell good news.
Meanwhile, cable networks saw a 37 percent operating income increase with an 8 percent revenue rise.
Other Disney empire media markets also saw a decrease with their film studios registering a 28 percent operating profit decrease and both the games and theme parks declining by 5 percent.
According to specialists, the Mouse House and other similar media companies will sooner rather than later have to face the ever increasing threat posed by the digital content.
With online streaming gaining grounds and transforming from niche to a mainstream preference, cable subscriptions seem to have become quite unnecessary, especially amongst the young viewers.
As the ESPN NFL registered numbers are, Disney’s CEO Iger presented optimistic future expectations as his declarations helped boost the falling market share numbers.
Following the quarterly earnings reports, the Disney empire fell by over 3 percent but recovered their footing after Iger’s shareholders conference call.
According to their statements, the Disney company will mark a growth in 2017 and should show even higher numbers the following year, in 2018.
Image Source: Wikimedia