Disney shares fall despite a string of movie hits

Walt Disney's latest profit has failed to impress Wall Street, despite producing blockbuster movie hits including Avengers: Endgame and Toy Story 4.

Disney's shares fell 5 per cent in after-hours trading when the firm posted figures that missed analysts' forecasts.

Profits at the entertainment giant fell 51 per cent to $1.4bn in the last three months, despite revenues rising 33 per cent to $20.2bn.

Avengers has become the biggest grossing movie ever, beating Avatar.

But profits from a string of movie hits, including Aladdin, failed to offset other costs at the company.

In March, Disney bought the TV and film assets of 21st Century Fox for $71bn, says a BBC report.

Disney chairman and chief executive Robert Iger said the third quarter results "reflect our efforts to effectively integrate the 21st Century Fox".

The company is also gearing up for a new digital streaming service, Disney+, which it is launching in November to challenge Netflix.

Costs to build online services will weigh on profits for several years, the company has said.

Streaming competitors from AT&T's Warner Media and Comcast's NBC Universal are expected next year.

Disney's direct-to-consumer and international unit reported an operating loss of $553m, up from $168m a year earlier, from consolidation of Hulu and spending on Disney+ and the ESPN streaming service.

At the theme parks unit, overall operating income rose 4 per cent to $1.7bn but fell at Disney's US parks. The company attributed the drop to expenses for an ambitious Star Wars-themed expansion in late May at California's Disneyland and lower attendance.

Media networks, which includes ESPN, the Disney Channels and FX, reported a 7 per cent increase in operating income to $2.1bn.