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TV drags on Disney

The Walt Disney Company reported mixed quarterly results, as surging movie and theme park units were undercut by weakness at some television businesses and a retrenchment in video games. Overall profit and revenue missed Wall Street’s expectations, a rarity for Disney. Shares of Disney fell about 6 per cent in after-hours trading.

Disney reported net income of $2.14 billion from $2.11 billion in the same period a year earlier.  Revenue totaled $12.97 billion, a 4 per cent increase. Analysts had expected $13.2 billion.

Disney said that it would pull the plug on Disney Infinity, a costly video game and toy line crossover that was introduced in 2013. Infinity has performed well, but sales have suffered amid intensifying competition. Ending production of the game, which effectively removes Disney from the self-published console game business, resulted in a $147 million charge in the quarter. More than 300 employees will lose their jobs.

In the quarter Disney’s biggest division, Media Networks, which includes ESPN, ABC and a suite of other channels, reported a 9 percent increase in operating income, to $2.3 billion. But cable revenue fell 2 percent, to $3.96 billion, as A&E Networks, which is co-owned by Disney and Hearst, experienced lower ad revenue and higher costs. Operating income at Disney’s broadcast television business declined 8 percent, to $278 million.

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