Entertainment giant Walt Disney continues to post strong growth in its important streaming business, but groans under high costs.
In the three months to the end of September, profits rose just one percent year-on-year to $162 million, the company said. Wall Street’s expectations were missed. The stock initially fell more than 5 percent in after-hours trading. Sales also disappointed despite an increase of nine percent to 20.2 billion dollars.
Disney’s streaming division thrived but made a $1.5 billion loss for the quarter. The Disney video service increased its subscriptions by 39 percent to 164.2 million, while Hulu and ESPN also grew significantly. Disney recently had around 235 million users across its three streaming services. Disney’s rival Netflix had just over 223 million at the end of the quarter. However, the numbers aren’t directly comparable, since Netflix only offers one video service and Disney’s balance sheet benefits from combo deals, so-called bundles.
