 announcement to make three new Star Wars films led to a rally in shares. Amid fierce competiti){kind=link}
After a decline in profits last year, Disney’s (NYSE:DIS) announcement to make three new Star Wars films led to a rally in shares.
Amid fierce competition from rivals, the year to September saw Disney’s profits fall four percent to $8.98 billion as well a decline in revenues by one percent.
Following Chief executive Bob Iger’s announcement of a deal with Rian Johnson, director of the upcoming “Star Wars: The Last Jedi”, Disney shares rose by one percent in after-hours trading.
“We remain optimistic about our future, in part because quality truly does matter,” he said on Thursday.
“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,”
Kathleen Kennedy, the Lucasfilm president, said: “We all loved working with Rian on The Last Jedi,”
“He’s a creative force, and watching him craft The Last Jedi from start to finish was one of the great joys of my career. Rian will do amazing things with the blank canvas of this new trilogy.”
In addition, Disney is also planning to directly compete with Netflix via a new streaming platform to be launched in 2019. Iger said on Thursday that the new service would be priced “substantially below” Netflix.
Iger claimed such investments, are “vital” to the firm’s success.
Disney has seen a tough year for profits. The fourth quarter of Disney’s financial year, saw profits dip one percent to $1.7 billion. Quarterly revenues fell by three percent to $12.8 billion due to impacts from the lower advertising revenue and a decline in cable subscriptions.
The firm’s parks and resorts are their only division with positive news for the year. It reported year-on-year revenue growth and rose six percent this quarter.
The company has been in recent talks about buying some of Twenty-First Century Fox (LON:C21), but this has not yet been confirmed but Iger did not rule out an acquisition.