Despite losses at BAMTech and Hulu, Disney’s media networks revenues for the quarter rose 9% to $6 billion and segment operating income rose 4% to $1.5 billion.
The new results come as Disney is closing in on its $71.3 billion acquisition of 21st Century Fox.
“We remain focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business, including the highly anticipated launch of our Disney-branded streaming service late next year,” said Disney CEO Bob Iger in a statement (PDF).
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Within the media networks segment, cable networks revenues rose 5% to $4.1 billion, but operating income fell $77 million to $1.2 billion. Disney blamed the lower operating income on the consolidation of BAMTech, partially offset by increases at the Disney Channels and Freeform. The loss at BAMTech was due to content and marketing costs and ongoing investments in their technology platform.
ESPN stayed mostly flat year over year as affiliate revenue growth was offset by higher programming and production costs and lower advertising revenue. Lower advertising revenue was driven by a decrease in impressions due to lower average viewership and fewer units delivered.
Disney’s broadcasting revenues rose 21% to $1.8 billion, and operating income rose $150 million to $379 million thanks to higher program sales and affiliate revenue growth. Advertising revenues mostly held steady as lower network impressions were offset by higher network rates and an increase in political advertising at the owned television stations.
Disney’s equity in the income of investees swung to a loss of $10 million primarily due to higher losses from Hulu and lower income at A+E Television Networks. Hulu’s decline was due to higher programming, marketing and labor costs, partially offset by growth in subscription and advertising revenue. A+E was down due to higher programming costs and lower advertising revenue, partially offset by higher program sales.
Disney’s consolidated revenues totaled $14.3 billion, up 12% year over year, and segment operating income totaled $3.3 billion, up 17% year over year.