- Disney reported earnings that fell short of expectations, sending the stock down after hours Thursday.
- But the shares were rising in early trading Friday after the company’s conference call during which CEO Bob Iger said the company’s streaming service will be priced “substantially below” Netflix.
Iger also said ESPN will offer its own streaming service next year.
Shares of Disney rose more than 2% on Friday, reversing late losses from the night before after the company’s management touted its plans for a new streaming service that will undercut rival Netflix on pricing.
The gains came even though Disney reported earnings that missed analyst expectations. Shares initially fell nearly 4% in late trading Thursday, after the top and bottom line misses.
“That is in part reflective of the fact that it will have substantially less volume. It will have a lot of high quality because of the brands and the franchises that will be on it that we’ve talked about. But it will simply launch with less volume, and the price will reflect that,” he said.
A similar ESPN streaming product will launch spring 2018, Iger said, fuelled by Disney’s $US3.75 billion acquisition of the BAMtech digital platform from Major League Baseball.
Earlier this week, CNBC reported that Disney had been in talks with 21st Century Fox about acquiring a bulk of company’s entertainment assets, but Lowell Singer, Disney’s VP of investor relations, quickly jumped in to say the company wouldn’t comment on what it called “press speculation.”
Wall Street analysts have an average price target of $US110.48 for the stock — 7.6% above Thursday’s closing price.
Shares of Disney are up 14.26% over the past year.