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Disney Investors Fret Over Flops

Disney (NYSE: DIS  ) reported earnings yesterday after the market's close, and investors greeted the news with a muted reaction; shares are down about 2% today.

Disney's third-quarter results were a mixed bag. The company beat analysts' expectations on earnings per share, but came in slightly under on revenue. Notably, The Lone Ranger was confirmed to be a total flop, and the company expects to see a revenue loss of $150 million to $200 million as a result. Disney also recorded a 36% loss in operating revenue due to the unsuccessful movie.

Motley Fool analyst Matt Argersinger breaks down the earnings, and notes that investors shouldn't focus too hard on The Lone Ranger. Bad movies are a risk Disney has to endure, but Disney has other excellent properties. A more significant risk is the rising cost of sports content. ESPN and ABC have to pay a big chunk of change to air baseball and other events, and that's a significant cost investors should keep an eye on.

Not sure about Disney's future? The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

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9/29/2016 4:00 PM
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