Nobody's perfect. Last week Disney (NYSE:DIS) reported that sales and profits fell over the past 12 months, marking the first time in seven years that the entertainment giant failed to set a new annual record.

During the earnings call, CEO Bob Iger and his executive team put the results into perspective and explained why they're bullish about Disney's long-term outlook. Here are a few highlights from that presentation.

Outside a Disney theme park castle.

Image source: Disney.

About that profit decline

Three items reduced fourth quarter and full year segment operating income by about $275 million or approximately $0.11 in earnings per share.
-- Iger

After marching higher by 7% in the prior fiscal year -- and setting its sixth straight record -- operating income dropped 6% in fiscal 2017. The two biggest reasons for the slump were declining profits in the media segment and a weaker theatrical-release slate as compared to 2016.

A few one-off items, including a hurricane that forced a two-day closure of Disney World and the cancellation of an animated film during production, made the loss seem bigger than it was. Adjusting for these events leaves operating income at $15 billion, or 4% lower year over year. Adjusted per-share earnings fell by less than 1% to $5.70.

ESPN and the shrinking media business

Ad revenue at ESPN was down in the quarter as higher rates were more than offset by a decrease in impressions.
-- Chief Financial Officer Christine McCarthy

Disney continued to struggle with a shrinking audience in the pay-TV industry, especially for its ESPN service. However, the pace of cable-TV subscriber losses moderated slightly in the fourth quarter, improving to a 3% decline from 3.5% in the prior quarter.

Drinks and snacks sit on a coffee table while a viewer watches a soccer match on TV.

Image source: Getty Images.

That's good news because it suggests the broadcast media business might stay stable, over the short term, while executives lay the groundwork for their shift to a direct-to-consumer streaming content model.

The parks business is rocking

We're nearing completion on Toy Story Lands in Shanghai and Orlando, both of which will open by next summer, and major construction continues on our Star Wars Lands in Disneyland and Walt Disney World, which are on schedule to open in 2019.
-- Iger

Disney's parks and resorts segment was the only one of its four operating divisions to post higher revenue and profits this year. For the fourth quarter, park attendance was up a healthy 5% and profitability improved, too.

Disney's international resort business got a nice contribution from the Shanghai park that beat executives' target of breakeven by booking a profit in its first year of operation. The strong demand across its resorts has executives eagerly plowing capital into park-expansion projects and three massive new cruise ships set to hit the water between 2021 and 2023.

A bright movie outlook

We're thrilled to have 2 new Star Wars movies in theaters during this fiscal year. The Last Jedi opens December 15. Ticket presales are strong, and the excitement will only intensify as we get closer to the release date.
-- Iger

Disney led all movie studios with its box office haul in fiscal 2016, thanks to massive hits including Finding Dory, The Force Awakens, and Captain America: Civil War. Fiscal 2017 marked an unsurprising step backward from that record, given the lower number of releases and the lack of a major new Star Wars movie launch.

The new fiscal year should look more like 2016 than 2017. Disney's upcoming film calendar is stacked with four Marvel movies, two Pixar releases and the likely global blockbuster, The Last Jedi, set to hit theaters in just a few weeks.

A risky pivot

We believe creating a direct-to-consumer relationship is vital to the future of our media businesses, and it's our highest priority this year.
-- Iger

Disney's plan for the media business involves a complex, expensive, and risky pivot into delivering content through streaming video apps that charge a subscription fee. No company besides Netflix has succeeded at that type of global scale, and it took the streaming video specialist a decade to reach 100 million users, or about the same base that the Disney Channel enjoys today.

Disney is betting that its trove of TV and movie content, plus its rights to live sporting events, will help it ramp up much more quickly. Its streaming initiative begins with an ESPN subscription service that will launch in early 2018, followed by a broader, Netflix-like app targeted for late 2019.

Demitrios Kalogeropoulos owns shares of Netflix and Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.