(Bloomberg) -- Walt Disney Co. Chief Executive Officer Bob Iger said earnings in 2017 will be “roughly in line” with last year, disappointing investors who sent the stock tumbling as much as 3.9 percent.
The entertainment giant has been under pressure to improve profit. Its TV business has faced criticism it failed to anticipate the competitive threat posed by Netflix and overpaid for sports rights for its ESPN cable network. Meanwhile, the movie unit is also expected to have a down year amid box office disappointments that included the latest installments in the “Pirates of the Caribbean” and “Cars” film franchises.
Disney warned last year that fiscal 2017 would be difficult, hurt by rising costs to televise National Basketball Association games and fewer films being released. Analysts had been predicting an earnings boost in 2017 of about 3 percent, according to estimates compiled by Bloomberg. Iger told investors Thursday that any real improvement wouldn't come until 2018.
A Disney app will be released in 2019, while an ESPN app will debut next spring. Starting next year, an ESPN online service will feature 10,000 live events in its first year, including Major League Baseball, hockey, soccer and tennis, as well as college sports. To jumpstart its new services, Disney said in August it was buying control of BamTech, the streaming arm of MLB, in which it previously held a one-third stake.
Iger said Thursday that the parks business is having a “tremendous” year. Its cruise unit said this week it's modifying some ship routes and the Walt Disney World theme park is monitoring the situation as Category 5 hurricane Irma barrels toward Florida.
The stock traded down 3 percent to $98.46 as of 11:55 a.m. in New York.
To contact the reporters on this story: Olga Kharif in Portland at okharif@bloomberg.net, Gerry Smith in New York at gsmith233@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Jessica Brice
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