Disney Investors Fret Over Flops
Disney reported earnings yesterday after the market's close, and investors greeted the news with a muted reaction; shares are down about 2% today.
Disney's third-quarter results were a mixed bag. The company beat analysts' expectations on earnings per share, but came in slightly under on revenue. Notably, The Lone Ranger was confirmed to be a total flop, and the company expects to see a revenue loss of $150 million to $200 million as a result. Disney also recorded a 36% loss in operating revenue due to the unsuccessful movie.
Motley Fool analyst Matt Argersinger breaks down the earnings, and notes that investors shouldn't focus too hard on The Lone Ranger. Bad movies are a risk Disney has to endure, but Disney has other excellent properties. A more significant risk is the rising cost of sports content. ESPN and ABC have to pay a big chunk of change to air baseball and other events, and that's a significant cost investors should keep an eye on.
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The article Disney Investors Fret Over Flops originally appeared on Fool.com.Erin Kennedy has no position in any stocks mentioned. Fool contributor Matthew Argersinger has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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