Disney shares fall despite positive earnings, as Fox deal could be in doubt

Disney shares ended lower Tuesday as uncertainty amid its Fox bid grows. And, while it's upbeat earnings cheered investors briefly, the stock moved lower again in after-hours trade.

Disney shares fall despite positive earnings, as Fox deal could be in doubt

Disney shares ended lower in the US Tuesday ahead of its second quarter earnings report and as its bid for 21st Century Fox could fall flat amid news Comcast is considering making an offer for Rupert Murdoch’s media business.

An upbeat earnings report initially buoyed investors, before the stock lost ground again after hours.

Walt Disney shares closed down 0.67% at $101.79. The stock remains in the red in after-hours trading.

Disney earnings upside surprise

Disney’s Q2 earnings report had some positive figures that beat analyst’s expectations. Net income grew 23% from a year earlier. And, in the six months to the end of March the company recorded a 51% increase.

Revenues were also upbeat, rising 9% in the three months to the end of March from a year earlier, while earnings per share grew 30%.

“Driven by strong results in our parks and resorts and studio businesses, our Q2 performance reflects our continued ability to drive significant shareholder value,” said Disney Chairman and CEO, Robert A. Iger.

“Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth,” he added.

Iger suggested that there is also the potential for further instalments of the Avengers story. “Given the popularity of the characters and given the popularity of the franchise, I don't think people should conclude that there will never be another 'Avengers' movie,” he said.

Comcast could end Disney’s Fox ambitions

While Disney’s earnings results were positive, investors have heir eyes firmly on the media company’s digital transformation plans, including its 21st Century Fox bid.

While the deal is currently undergoing regulatory investigation, US cable operator Comcast is said to be considering making a bid for Fox, too.

Comcast has already complicated the potential deal with an all cash offer for Sky – a subsidiary of Fox. The US cable company expressed interest in acquiring Fox last year, but at the time Murdoch was said to favour a deal with Disney.

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