Disney’s fiscal 4th-quarter profit beats estimates, revenue comes up shy

Walt Disney Co. reported fiscal fourth-quarter earnings Thursday that exceeded Wall Street expectations, though revenue fell slightly short.

The Burbank entertainment giant’s shares fell 1% in after-hours trading.

Disney said revenue hit $13.51 billion in the three months ended Oct. 3, up 9% from the same period a year ago. Profit grew 7% to $1.6 billion, or $1.20 a share.

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Analysts surveyed by FactSet had predicted that Disney would generate fourth-quarter earnings of $1.14 a share and sales of $13.55 billion.

Walt Disney Co. reported fiscal fourth-quarter earnings Thursday. Wall Street has been closely watching the company since Disney acknowledged in August that profits from ESPN, shown here, might not be as robust as initially forecast.

(Jessica Hill / AP)

Profit at the company’s media network’s business rose 27% compared with the prior-year quarter, thanks to improved results from ESPN and other cable channels. Networks, which includes ESPN and ABC, are Disney’s largest segment.

The movie and TV studio business posted flat revenues of $1.78 billion. However, its profit more-than-doubled to $530 million due to greater TV and streaming distribution revenue for its content, and the theatrical performance of “Ant-Man” and Pixar’s “Inside Out.”

In a statement, Disney Chairman and Chief Executive Bob Iger called it “a strong quarter.”

Wall Street has been nervously watching Disney since August, when the company acknowledged that profit from ESPN and other cable channels would not be as robust as initially expected because fewer consumers are subscribing to full pay-TV packages.

Investors are spooked about the ramifications of cord-cutting -- viewers abandoning cable subscriptions in favor of lower-cost options.

The sports network last month announced that it would lay off about 300 workers, or about 4% of its workforce. Last week, ESPN shuttered its respected Grantland online magazine, which was based in Los Angeles, after a turbulent patch. ESPN said it planned to focus on “projects that we believe will have a broader and more significant impact across our enterprise.”

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The saga continues in the seventh installment of the “Star Wars” series created by George Lucas. The latest film is being directed by J.J. Abrams.   (Chris Pizzello / Invision/Associated Press)

ESPN, like other cable networks, has been under pressure to control costs because it no longer can depend on steady growth from its most reliable revenue stream: fees from cable and satellite subscribers.

Disney’s movie studio released “Ant-Man” during the quarter, which stacked up nearly $180 million in domestic ticket sales, according to box office data firm Rentrak.

The current quarter is expected to feel the force of “Star Wars: The Force Awakens” as the LucasFilm hits theaters next month, in time for the holidays.

Despite the August reset, Disney’s shares are up 20% this year. Shares ended the Thursday trading session virtually flat at $113.

Twitter: @MegJamesLAT

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