Lost subscribers for ESPN spoil Disney’s fairy-tale quarter

Disney CEO Bob Iger on Tuesday reported the biggest quarterly profit in company history, but rather than take a victory lap, he was forced to mount a vigorous defense of its powerhouse ESPN.

The cable sports giant reported subscriber losses in the last three months of 2015, and investors — focusing on ESPN’s health as a bellwether of the overall pay TV business — drove Disney shares down as much as 6.4 percent in after-hours trading.

Iger, in a conference call with Wall Street analysts after reporting the late 2015 ESPN retreat, revealed the “subs trends that are going in a negative direction have abated.

“The predictions that many have made are more dire than they should be,” Iger added.

Still, the CEO seemed to be at a loss to comprehend that not all households are willing to shell out $8 a month to keep the pricey sports network in their cable packages. He argued that sports is good for everyone: distributors, advertisers and consumers.

The ESPN news ruined the Mouse House party for its successful “Star Wars” in December, which helped Disney beat Wall Street profit and revenue expectations.

Total revenue and operating income increased 14 percent and 20 percent — to $15.2 billion and $4.3 billion, respectively — as “Star Wars: The Force Awakens” propelled the company to a record quarterly profit.

Diluted earnings per share came in at $1.73 — a 36 percent year-over-year increase that marked Disney’s 10th consecutive quarter of double-digit EPS growth.

The media-networks segment, which houses ESPN, recorded a 6 percent dip in operating income, making it the only segment to post a decline. The drop was partly due to the timing of college football and related programming expenses.

Studio entertainment’s 86 percent operating-income increase was the largest, followed by consumer products (up 23 percent) and parks and resorts (up 22 percent).

All four Disney segments reported revenue increases.