DIS Walt Disney Co

By Tess Stynes 

Walt Disney Co.'s earnings rose a weaker-than-expected 1.7% in the latest quarter, helped by the popularity of the films "Star Wars" and "Zootopia" but hurt by lower ad revenue at ESPN and costs related to its new park in Shanghai.

Shares of the Burbank, Calif., company fell 6.1% to $100.10 in recent after-hours trading as per-share earnings, excluding certain one-time items, and revenue missed expectations. Through Tuesday's close, the stock has risen roughly 20% over the past three months.

Investors have remained focused on subscriber trends at the company's ESPN sports network and the effect of "cord-cutting" and "skinny bundles" on Disney's television business. Disney said that while profits rose at ESPN, ad revenue fell because of lower ratings and rates, which the company said was hurt because there were fewer college football playoff games in the second quarter this year.

Earlier on Tuesday, ESPN and Verizon Communications Inc. said they settled a yearlong legal dispute over how the sports network is distributed by the phone giant's Fios unit. ESPN has been left out of several channel packages over the years, but in February, Verizon revamped its base packages to include one with sports channels like ESPN and one without.

A likely topic on the earnings conference call will be Disney's CEO succession plans in the wake of Tom Staggs -- once viewed as the heir apparent to Chief Executive Robert Iger, stepping down from the No. 2 executive post.

For the period ended April 2, Disney reported a profit of $2.14 billion, or $1.30 a share, up from $2.11 billion, or $1.23 a share, a year earlier. Excluding a write-down, the company had earnings of $1.36 a share.

Revenue increased 4.1% to $12.97 billion.

Analysts polled by Thomson Reuters expected per-share profit of $1.40 and revenue of $13.19 billion.

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

(END) Dow Jones Newswires

May 10, 2016 17:01 ET (21:01 GMT)

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