'Guardians', 'Maleficent' drive Disney's revenue higher
(Reuters) - Walt Disney Co (DIS.N: Quote) reported a better-than-expected 7 percent increase in quarterly revenue on Thursday, driven by hit movies "Guardians of the Galaxy" and "Maleficent."
"Guardians," which was released in July, and "Maleficent," starring Angelina Jolie as a black-robed villain, helped drive almost 18 percent growth in Disney's movie studio unit.
Disney's shares were off 1.8 percent at $90.35 in extended-trading, after closing at a record high of $92 on Thursday.
"Guardians" features a machine-gun-toting raccoon amid a cast of misfit super heroes. "Maleficent" brings back one of Disney's most popular character since she appeared as the wicked fairy in the 1959 animated feature "Sleeping Beauty".
The studio business also benefited from strong DVD sales of "Frozen," a story about two royal sisters in an icy kingdom.
Operating income at sports behemoth ESPN declined due to higher contract rates for high-end National Football League and Major League Baseball games, which helped drag down the company's cable networks unit by 1 percent.
The drop in operating income at cable networks likely drove Disney shares lower, said Gabelli & Company analyst Brett Harriss, who rates Disney a "hold." "Cable networks were a little weak," he said.
Harriss said he expected ESPN would make up for the higher programing costs in future quarters through higher fees from affiliates.
Revenue in Disney's Media Networks, home to Disney channels, ESPN and ABC, rose 5.5 percent due to higher broadcasting revenue from shows such as "Shark Tank" and "America's Funniest Home Videos." Continued...