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Source: disneylandnews.com.

Until very recently, it was nearly impossible to hear anything bad said about The Walt Disney Company (NYSE:DIS). Disney was one of the market's darling growth stocks. Shares of the diversified consumer conglomerate soared from $94 per share at the beginning of 2015 to over $120 per share, heading into its most recent earnings report. But as soon as the company released earnings after market close on Aug. 4, suddenly the story changed.

Now analysts are widely criticizing Disney's supposedly weak earnings report, even though the underlying results were very good. And the stock has fallen significantly since earnings, closing on Aug. 13 down 11% from the Aug. 4 close. But while the market's mood may have soured on Disney in the near term, the long-term fundamentals remain attractive. Disney is no doubt struggling against some tough headwinds, including the strengthening U.S. dollar and increased media competition. However, the real culprit for Disney's stock swoon seems to be the unrealistic expectations heading into earnings.

First, a quick recap
Disney reported $1.45 in earnings per share on $13.1 billion of revenue in the latest quarter. Year over year, revenue and earnings per share grew 5% and 13%, respectively. These are strong growth rates, particularly in a tough operating climate. The rising U.S. dollar is hurting large multinational corporations such as Disney, but it's noteworthy that the company came through with solid growth anyway.

Still, shares of Disney collapsed 9% the day after reporting earnings, all because revenue slightly missed analyst expectations. Analysts expected Disney to produce $13.23 billion in revenue, according to estimates compiled by Thomson Reuters. Did investors miss that Disney beat earnings expectations, which called for $1.42 per share, and that Disney's quarterly profit set a record for the company?

ESPN worries
Adding to investor angst were comments from Disney CEO Bob Iger on the company's conference call with analysts. He had this to say about ESPN:

We are realists about the business and about the impact technology has had on how product is distributed, marketed, and consumed. We are also quite mindful of potential trends among younger audiences, in particular many of whom consume television in very different ways than the generations before them. Economics have also played a part in change, and both cost and value are under a consumer microscope. All of this has and will continue to put pressure on the multichannel ecosystem.

He went on to say that ESPN suffered "some modest" subscriber losses last quarter, the vast majority of which he said were due to decreases in multichannel households.

Why I'm not worried about ESPN
The comments about ESPN have some analysts in panic mode, with some predicting the death of TV and, judging by Disney's stock-price movements, investors are panicking as well. But I'm not, first and foremost because I don't believe ESPN is in trouble. It's certainly true that the way TV is distributed is changing. As part of traditional cable packages, ESPN will suffer guilt by association as an increasing number of consumers cut the cord and opt for cheaper options. However, ESPN will still be involved in over-the-top offerings such as DISH Network Corp.'s Sling TV, which provides subscribers a smaller list of channels, including ESPN and ESPN2, for $20 per month.

ESPN remains the No. 1 brand in sports media, and that will remain so regardless of the method of distribution. ESPN has licensing agreements with the NFL, the NBA, and Major League Baseball that run into the next decade. That's huge for ESPN, because it gives the network an ironclad grip on live sports, which is critical. In fact, according to the company, 96% of all sports programming is watched live. In other words, NFL fans are still going to watch Monday Night Football, whether it's through a traditional cable package or via streaming.

Losing the expectations game
As Disney stock roared higher to start the year, its valuation multiples expanded. This development set higher expectations for the company's earnings report. When something like this happens, it's inevitable that sooner or later, a company won't be able to meet analyst expectations. Disney investors rushed for the exits, but that doesn't mean the long-term picture has changed.

Disney remains one of the strongest brands in the world, with a highly profitable and growing business. Don't get caught up in the short-term expectations game.

Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.