Disney Shares Fall Despite Major Disney+ News

Big Disney+ news was not enough to buoy investor confidence against lower-than-expected quarterly earnings reported in today's investor conference call, and the company's stock tumbled almost 4% in after-hours trading. While Avengers: Infinity War has become the highest-grossing film of all time, the $3.8 billion in revenue that Disney Studios reported was down from expectations and nearly a third lower than last year's numbers, leading to some unease. The writedown is being blamed on costs associated with the Fox merger, as well as the dismal box office performance of X-Men: Dark Phoenix. It is possible that this year, Disney will be the first studio ever to earn $9 billion at the box office in a calendar year.

Per a breakdown by CNBC, Disney's Media Networks were up a little more than 20% year over year, and its Parks division revenue rose 7%. While that parks number might sound like good news on the surface, investor questions about the performance of Star Wars: Galaxy's Edge betray the fact that those numbers could have been -- and in all likelihood were expected to be -- higher. The acquisition of NBC's share of Hulu and hefty investments in Disney+ and ESPN+ dragged down the company's Direct to Consumer division to the tune of over $500 million in losses on $3.68 billion in total revenue.

Up to this point, Disney+ news has been greeted by an enthusiastic stock market that has rewarded each new set of details revealed about the upcoming streaming service with gains, underscoring confidence in the Disney brand and the company's strategy for moving into the streaming space. Long-awaited details on how Disney+ would integrate with Disney's other direct-to-consumer services drew praise but weren't enough to overcome the other numbers that just weren't adding up the way investors would have liked.

On the earnings call, Disney CEO Bob Iger said the company will offer a bundle of Disney+, ESPN+ and an ad-supported Hulu subscription for $12.99 per month, or the same cost as Netflix's standard subscription plan.

With an incredible run of franchise successes at the box office, Disney is likely, at least in part, a victim of its own success. Performing well is not enough if that "well" is not as well as the company has conditioned people to expect.

Disney+ will launch on November 12. The company expects that next quarter, they will continue to lose money as their Direct To Consumer division invests heavily in getting the service ready for rollout.