Shares of media companies Time Warner and Walt Disney fall nine percent. Comments out of Disney on its outlook for its cable business driving both stocks lower. Leah Duncan reports.
A strong performance for Time Warner and a mixed bag for Disney. Profit and revenue topped analysts estimates at Time Warner, thanks to a deal with video streaming service Hulu and the release of Batman and Mortal Kombat X video games. Disney though missed revenue estimates and cut its profit forecast for its cable networks unit, citing a decline in subscribers. The comments from Disney pushing both stocks lower. But S&P Capital IQ's Tuna Amobi thinks investor reaction may be a bit overblown, especially to Disney. (SOUNDBITE) TUNA AMOBI, MEDIA ANALYST, S&P CAPITAL IQ (ENGLISH) SAYING: "We think that, you know, the concerns are overdone, frankl. We think ESPN remains a very unique asset. We don't think that there is any possibility that ESPN will be disinter-mediated by the online video platforms, and all of these video options out there, which seem to be the concerns that some investors are having as to subscriber losses." Despite the down day for the stocks, Amobi says both companies stand to benefit from the vibrant content business. He has a buy recommendation on the two based on growth potential.