Disney stock closes down 9%
Disney shares closed at $31.54, down 9% in trading Wednesday -- even though the entertainment conglomerate just reported third-quarter earnings Tuesday that beat consensus estimates among analysts.
Beneath the seemingly good quarter, analysts noted that the film studio and interactive media group missed projections and that advertising revenue from cable network advertising was up a modest 2%, lower than some had forecast. Theme park margins also declined because of a land sale in Europe and continued financial reverberations from Japan's earthquake.
Disney also warned that three items would affect results in the fourth quarter: Lower projected DVD sales for the film studio compared with a year earlier, lower sales of syndicated TV shows and higher costs at ESPN.
"Disney has not lived up to the earnings-beating behavior it is known for," wrote media analyst Michael Nathanson of Nomura Equity Research.
Among the few entertainment stocks to buck Wednesday’s downward trend were Lions Gate Entertainment and DreamWorks Animation. Lions Gate saw its shares rise 2% to $6.74 the day after it reported stronger than expected net income and as the New York Times reported that it is considering launching a cable channel branded with filmmaker Tyler Perry. Shares in DreamWorks Animation rose 2% to $18.77.
A Disney spokeswoman declined comment.
-- Dawn C. Chmielewski and Ben Fritz
Photo: Minnie and Mickey Mouse celebrate Tanabata, or the Star Festival, at Tokyo Disneyland. Credit: Yoshikazu Tsuno / AFP/Getty Images