Disney rides Black Panther to profit

Lupita Nyong'o and Letitia Wright Image copyright Marvel Studios
Image caption The Black Panther movie has brought in more than $1bn at the box office

Black Panther's runaway success boosted Walt Disney's profits in the first three months of 2018, helping to offset pressures in the TV business.

Profits up 23% to $2.9bn (£2.14bn) beat analysts' forecasts, while revenue rose 9% year-on-year to $14.5bn.

The increase was driven by the film and theme park units, which outshone a TV arm facing strong digital competition.

The profits came amid questions about Disney's plan to buy the bulk of 21st Century Fox's business.

Disney last year announced it would buy certain Fox assets, including its film and television studios and its 39% stake in Sky, in a deal valued at more than $66bn, including debt.

At the time, Disney boss Robert Iger said the purchase would help to supplement Disney's content as it plans to compete with the likes of Netflix by starting its own online subscription streaming sites.

Mr Iger said Disney remains committed to the deal, which needs approval from regulators to move forward.

He declined to comment on reports that Comcast, a major US pay-TV and internet provider, may be preparing a rival offer for Fox assets.

Comcast had been interested in Fox last year, but was reportedly rebuffed in favour of Disney due to anti-trust concerns.

Comcast last month made a formal £22bn offer for the UK broadcaster, challenging Fox's plans to buy the 61% of Sky it does not already own. Disney had planned to become Sky's full owner if Fox's transaction went through.

Moving online

Mr Iger said Disney's digital plans, which are a response to rapidly falling cable television subscriptions, do not depend on Fox to move forward.

The company has already launched its ESPN+ sports service and has invested in Hulu, a television and moving streaming site.

The firm also plans to start a Disney-branded subscription service in late 2019 that will offer access to the company's significant film and television catalogue.

Image copyright ROSLAN RAHMAN/AFP/Getty
Image caption Disney's back catalogue includes Marvel and Star Wars movies as well as classics such as Beauty and the Beast

Spending on those initiatives contributed to a decline in operating income in the firm's media networks unit, which accounted for almost half - $6.1bn - of the firm's revenue in the quarter. Revenue rose 3% from the same period in 2017.

Disney said it expects to spend roughly $180m on its streaming plans this year, about $50m more than originally planned.

The firm is also looking at creating new theme parks, including potentially in China, Mr Iger said on a conference call with financial analysts.

"It doesn't necessarily mean that we're going to build something anytime very soon, but we're going to look," he said.

Disney's parks and resorts have helped to boost the firm's results in recent years. In the most recent quarter, parks and resorts revenue increased 13% year-on-year to almost $4.9bn.

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