Disney shares rose in after-hours trading Tuesday as the company reported an earnings beat and revealed key details about its new ESPN streaming service amid subscriber losses at the struggling cable network.
Disney CEO Robert Iger said the service, called “ESPN Plus,” will launch “sometime this spring” as part of a “completely redone” ESPN app. The over-the-top service will cost $4.99 per month and provide users with access to live sporting events and ESPN’s original content, including the “30 for 30” documentary series.
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The redesigned app will provide personalized scores, highlights and news for users in both video and written formats, as well as live-streaming of ESPN networks for paid subscribers and access to the ESPN Plus service. ESPN Plus is seen as Disney’s answer to issues raised by the cord-cutting trend, which has cost ESPN thousands of paid subscribers in recent years and negatively impacted the network’s financials.
“If anything points to what the future of ESPN looks like, it will be this app,” Iger said during a call with analysts.
The Walt Disney Company reported quarterly earnings that topped Wall Street’s expectations on Tuesday, but missed slightly on revenue in its first fiscal quarter of 2018. The media and entertainment giant posted adjusted earnings per share of $1.89 and revenue of $15.35 billion.
Disney said the adjusted EPS accounted for a one-time benefit of $1.6 billion tied to the recent passage of tax reform. Wall Street had projected EPS of $1.61 and revenue of $15.46 billion, according to Thomson Reuters.
The company’s parks and resorts segment saw revenue rise 13% in the first quarter, while film and consumer products segments posted slight declines. Media network revenue was flat, despite weaker-than-expected ad sales and declining subscribers at ESPN.
Disney shares rose roughly 1.5% in after-hours trading.
Iger did not address the recent departure of ESPN President John Skipper, who abruptly resigned from his position last December to address personal issues.
Iger said the “regulatory process has begun in numerous jurisdictions around the world” in relation to the company’s pending $66.1 billion acquisition of certain 21st Century Fox film and television assets. The Disney CEO expressed enthusiasm for what the deal would mean for the company’s production of original, direct-to-consumer content.
“What we’re buying here is significant production capabilities, and with that the talent to produce on our behalf,” Iger said.
Disney also announced Tuesday that it has hired “Game of Thrones” showrunners David Benioff and D.B. Weiss to create a new series of “Star Wars” movies, separate from a new trilogy that will be developed by director Rian Johnson.
This story has been updated.