Disney promises earnings growth next two years, shares rise
By Lisa Richwine and Arunima Banerjee
(Reuters) - Walt Disney Co (DIS.N: Quote) executives promised earnings growth for the next two years, easing investor concerns over a quarterly drop in ad sales and subscribers at its ESPN sports network, sending the media company's shares up in after-hours trading.
Executives said they expected modest earnings per share growth in fiscal 2017 and "more robust growth" in fiscal 2018 and beyond, as ESPN attracts more online viewers, the new Shanghai theme park lures visitors and the movie studio releases more "Star Wars" installments and other films.
The company's stock rose 2.7 percent to $97.25 after hours.
Disney and media rivals face challenges from "cord cutters" who are dropping TV subscriptions for cheaper and more convenient online services, and the issue is especially important for ESPN, one of Disney's most important brands.
Excluding items, the company earned $1.10 per share in the latest quarter, missing the $1.16 consensus forecast of analysts polled by Thomson Reuters I/B/E/S.
Shares dropped immediately after the report, but revived after executives' comments on growth in a call to analysts.
"We are extremely confident that we'll continue to deliver significant long-term growth," Chief Executive Bob Iger said.
The future of ESPN has been in focus since August 2015 when Iger acknowledged "modest" subscriber losses at the sports network. Continued...