Walt Disney Co. (DIS) CEO Bob Iger presented details of the new ESPN app and told investors how the major assets of Twenty-First Century Fox (FOXA) fit into his company's global plan to take on Netflix (NFLX) in Disney's first fiscal-quarter earnings call Tuesday.
Disney earned $1.81 per share, topping expectations of $1.61 per share in the first fiscal quarter of 2018 on a non-GAAP basis. Revenues of $15.35 billion missed forecasts of $15.48 billion, however. Disney announced a $1.6 billion benefit from the new tax bill.
Shares gained after-hours and in pre-market trading Wednesday. At Wednesday's open, they were up 0.7% to $106.95.
Iger said Disney has begun seeking regulatory approvals for its acquisition of Twenty-First Century Fox's film and TV studios, cable networks, global satellite TV businesses and other assets for $52.4 billion, or $66.1 billion including debt.
Among other benefits, Iger said Fox would bring the capacity for more content that can feed into its direct-to-consumer video offerings.
"This obviously has implications well beyond domestic consumption and domestic distribution platforms," Iger said.
Disney is girding for competition inside and outside the U.S. against Netflix, which posted a record global streaming subscription additions of 8.3 million in the fourth quarter.
The company's Lucasfilm, Pixar, Marvel and Disney brands give the company an advantage over Netflix, Iger suggested. "We have an opportunity to spend more on original product of course but not necessarily to go in the volume direction that Netflix has gone," he said.
Further on the streaming front, Iger said Disney will launch its ESPN Plus app in the spring. The app, which will cost $4.99 per month, will feature "exceptional video and sound quality," Iger said. It will carry live streams of all ESPN networks--if users also subscribe to cable or online channel packages.
Movie distribution revenues increased in the quarter, with the release of "Star Wars: The Last Jedi," Marvel's "Thor: Ragnarok" and Pixar's "Coco." The first fiscal quarter last year included "Rogue One: A Star Wars Story."
Ticket pre-sales for Marvel's "Black Panther," which debuts on Feb. 16, are "outpacing every other super hero movie ever made," Iger said. Disney releases "A Wrinkle in Time" staring Oprah Winfrey, Reese Witherspoon and Mindy Kaling on March 9 and a Han Solo origin story, "Solo: A Star Wars Story" in the spring.
"Game of Thrones" creators David Benioff and D.B. Weiss have signed on to write and produce a new series of Star Wars films.
Asked why Disney did not have Benioff and Weiss develop an original series that would play on its streaming services and build value over time, as "Game of Thrones" did, Iger said the duo wanted to make Star Wars films. "To my knowledge they didn't express interest in creating a series," he said.
Subscribers to Disney's cable networks fell by 3%, roughly matching last year's decline. Subscriber trends showed a "modest sequential improvement" from the prior quarter for the second reporting period, CFO Christine McCarthy said.
With the growth of lower-cost, slimmed-down bundles of fewer channels with mobile streaming, Iger said, Disney is attracting "cord nevers" who have not previously had cable.