Walt Disney Co, an investor favorite for consistently beating Wall Street earnings targets, reported a rare miss on Tuesday as advertising and subscriptions declined at sports channel ESPN and theme park revenue came in weaker than expected.
The home of Mickey Mouse got a boost from animated hit film “Zootopia” but it announced an exit from the console video game business as it dropped the Infinity title it launched less than three years ago.
Shares of the world’s best-known entertainment company fell more than 5 percent in extended trading.
Disney and other media companies have been hit by the trend of “cord-cutting” as younger viewers opt for streaming services over cable and satellite TV channels. Investors are particularly focused on how ESPN, one of the strongest cable brands, weathers the storm.
“Cable networks continue to face meaningful headwinds and Disney has yet to really answer how they are going to restore growth,” BTIG analyst Richard Greenfield said.