Walt Disney Co. reported the highest quarterly earnings in its history as the success of the latest installment of "Star Wars" offset continued woes at its ESPN sports network.

Shares, down 21% over the past three months, fell 3.6% to $88.88 in recent after-hours trading.

Disney's results were "driven by the phenomenal success of 'Star Wars,'" Chairman and Chief Executive Robert Iger said. The company said revenue at its movie business jumped 46% to $2.72 billion, while operating income surged 86% to $1 billion.

Disney cited not only the strong theatrical success of "Star Wars" but also sales of its classic titles.

The Burbank, Calif., company started selling items like toys and T-shirts related to the movie beginning in September; however, for accounting reasons, Disney couldn't recognize revenue from such sales until the quarter in which the movie was released.

For the company's first quarter, Disney's consumer-products division reported sales rose 8% to $1.91 billion, while operating income increased 23% to $860 million.

On Monday, Hasbro Inc. reported strong revenue during the holiday period, helped by a surge in demand for lightsabers, action figures and other toys tied to "Star Wars."

Disney is looking to build on the success of "Star Wars: The Force Awakens" with years of sequels, toys, videogames and theme-park attractions.

The theme-park segment's revenue grew 9% to $4.28 billion, while operating earnings increased 22% to $981 million. A key catalyst this year for Disney will be the company's planned opening of its theme park in China, expected in June.

Investors also are expected to be listening on the company's earning conference call for any details regarding the effect of "cord-cutting" on Disney's cable business, particularly sports giant ESPN.

A shift toward streaming video and rising cable TV costs have prompted more consumers to either cut the cord entirely or move to "skinny" bundles of channels that sometimes exclude ESPN.

For the latest quarter, the cable-television business posted revenue growth of 8% to $6.33 billion. The segment's operating income fell 6% to $1.41 billion.

Over all, for the three months ended Jan. 2, Walt Disney reported a profit of $2.88 billion, or $1.73 a share, up from $2.18 billion, or $1.27 a share, a year earlier. Excluding certain items, per-share earnings rose 28% to $1.63.

Revenue increased to $15.24 billion from $13.39 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.45 and revenue of $14.75 billion.

Write to Tess Stynes at tess.stynes@wsj.com

 

(END) Dow Jones Newswires

February 09, 2016 17:05 ET (22:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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