Disney stock rose in after hours trading after its earnings came in better than forecasts, even as rising costs at ESPN weighed on results. Bobbi Rebell reports.
PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL Disney's quarterly earnings beat forecasts and revenue rose 5 percent- which was better than expected. But the results were lower than a year ago. One problem: rising costs for buying TV sports rights at its ESPN network- that was already known. But there are other concerns. Reuters' LA Bureau Chief Ron Grover: SOUNDBITE: RONALD GROVER, REUTERS LOS ANGELES BUREAU CHIEF (ENGLISH) SAYING: "The problem is the studio numbers still don't look great. Yes they told The Street that the studio's numbers weren't going to look great. But earnings were off by about 5%. That's a lot for the studio." Revenues were up in their parks and resorts division. Disney has been investing in new attractions and charging higher prices at its theme parks. Morningstar's Michael Corty: SOUNDBITE: MICHAEL CORTY, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "They made a lot of needed improvements to the park in Florida and I think that is going to benefit results in the Florida park for the next couple of years. And in California they have the "Cars Land" and that started benefiting Disney in the middle of 2012 and I'd expect that to continue through this year as well." Disney stock has been near record levels, and rose on the news. But it's fully valued according to Morningstar's Corty: SOUNDBITE: MICHAEL CORTY, EQUITY ANALYST, MORNINGSTAR (ENGLISH) SAYING: "We are telling our clients to basically hold the stock at this price. I think all the fundamentals for Disney are looking very strong but I believe a lot of that is priced into the stock at these levels. Disney also says it has sold out its advertising for the upcoming Academy awards.