Disney Earnings Disappoint As ESPN Suffers

The Walt Disney Co. reported disappointing earnings and revenue Thursday, as the company's cable networks took a hit from lower advertising revenue and higher costs for ESPN. The media conglomerate reported net income of $1.77 billion, or $1.10 a share, on sales of $13.1 billion, with adjusted earnings the same on a per-share basis. Analysts polled by FactSet expected Disney to report adjusted earnings of $1.16 a share on revenue of $13.5 billion. Cable networks' operating income fell $207 million year-over-year to $1.4 billion, and ESPN was a big reason why, Disney said. "The decrease at ESPN reflected lower advertising and affiliate revenue and higher programming and production costs," Disney said in its earnings announcement. "Lower advertising revenue was primarily due to fewer impressions and lower rates." ESPN has suffered from cord-cutting and the rising price for rights to live sports broadcasts. Disney stock, which ended Thursday's session with a gain of 0.3%, fell more than 3% in late trading.