New Star Wars trilogy raises Disney hopes

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Walt Disney profits declined last year – the first annual fall since 2009 – amid stepped-up competition from online rivals.

But shares rallied after it announced a deal to make three new Star Wars movies.

The company is also working on a live-action Star Wars series for a new online streaming service.

The firm said it is confident it still has the blockbusters audiences want.

Chief Executive Bob Iger said Disney had struck a deal with Rian Johnson, director of the upcoming “Star Wars: The Last Jedi,” to create a new trilogy of the science fiction blockbuster.

“The Last Jedi” is the second movie in the current trilogy, and the deal assured fans and investors it would not be the last.

“We remain optimistic about our future, in part because quality truly does matter,” Mr Iger said.

Disney shares rose about 1% in after hours trading, following an initial drop when Disney posted results.

The entertainment giant plans to launch a sports-focused ESPN+ app in the spring, and a Disney streaming service in 2019.

Disney boss Robert Iger said those investments, which add to an existing Disney subscription service in Europe, are “vital” to the firm’s future.

“Our goal here is to be a viable player in the direct-to-consumer space, a space that we all know is a very compelling space to be in,” he said on Thursday, after the firm published its results for its financial year, which ended in September.

He declined to address reports that the company has held talks with 21st Century Fox about acquiring parts of its business.

But he did not rule out an acquisition.

“I don’t think there’s ever such a thing as having too much quality,” he said,

Digging into the numbers

Disney is grappling with a challenge from online video, which has won viewers of traditional television and movies and is driving a shift away from cable television.

Disney reported $8.98bn in profits for its financial year, which ended in September. That was 4% lower than 2016 and marked the first year-on-year annual decline since 2009.

Profits in the three months to the end of September slipped to $1.7bn, down 1% year-on-year.

Total quarterly revenue was $12.8bn, down 3% year-on-year, as hurricanes, lower advertising revenue and a decline in cable subscriptions weighed on the results.

Revenue in its movie division also plunged 21%, which the firm said was due to a tough comparison to last year, when a new Star Wars movie lifted results.

Disney’s parks and resorts business, which has steadied results in recent quarters, was the only division that reported year-on-year revenue growth in the quarter, rising 6%.

But even that unit was hurt by the hurricanes that struck the US earlier this year. Disney said that accounted for a roughly 3% decline in US attendance.

New Star Wars trilogy raises Disney hopes

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