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Disney Weathers the Storm

Shares of The Walt Disney Co. were down slightly (5 cents or 0.05%) to $112.95 each in after-hours trading Thursday after it reported fiscal fourth quarter results, reflecting strong financial performance and what appears to be a calmer investor base.

It helped that Disney was firing on all cylinders in the quarter – overall revenue was up 9.1% and segment operating income rose 27%. At media networks, revenue increased 12% and segment operating income rose 27%, fueled by a 12% increase in revenue and a 30% jump in segment OI at its cable networks. ESPN reported strong performance, with ad revenue up 5% in the period. Domestic affiliate fees across its cable networks were up 17% in the period.

Subscribers to some of its networks were down in the quarter, in line with customer declines across the board at most distributors. While Disney did not offer any details on the losses, investors appear to be taking them better than they did in August, when the revelation that subscribers were down forced Disney to reduce guidance, a move that sent its stock and the rest of the programming sector, into a tailspin.

On a conference call with analysts Disney chairman and CEO Bob Iger said he wouldn’t take back anything he said on the fiscal third quarter conference call, adding that Disney’s revised guidance stull stands.     “There certainly should be no reason to panic over comments like that,” Iger said. “The fact remains that we are in an environment today that is definitely changing, there is definitely more competition for people’s time.”

Iger added that Disney is positioned to take advantage of that, including the launch of a direct-to-consumer offering in the U.K. called Disney Life and its recent deal to have its content distributed by Sony’s PlayStation Vue over the top service. 

“There’s not only a silver lining but a glass half-full perspective on this,” Iger said, adding that of the 50 top cable shows in 2015, 26 of them were ESPN’s.