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Walt Disney Posts Record Annual Profit

Walt Disney Co. DIS -0.90% Chief Executive Robert Iger continued to pitch his company’s digital future to investors on Thursday, even as the company reported a year of massive success for traditional movie releases like “Black Panther.”Mr. Iger predicted an accelerated timeline for the megadeal driving the strategic shift to streaming, saying Disney’s acquisition of…

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Walt Disney
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DIS -0.90%

Chief Executive Robert Iger continued to pitch his company’s digital future to investors on Thursday, even as the company reported a year of massive success for traditional movie releases like “Black Panther.”

Mr. Iger predicted an accelerated timeline for the megadeal driving the strategic shift to streaming, saying Disney’s acquisition of major assets of

21st Century Fox
Inc.


FOX 0.66%

could close “meaningfully earlier” than the mid-2019 date previously projected.

The tie-up will allow Disney to launch a direct-to-consumer service in which television shows based on Disney franchises like “High School Musical” will stream alongside programming from Fox’s National Geographic brand, combining two entertainment forces in a way that could rewrite Hollywood economics as traditional studios take on new competitors from Silicon Valley and Netflix Inc.

Disney’s $71.3 billion acquisition of Fox is fueling the company’s push for a direct-to-consumer offering featuring the studio’s movies and television shows. On an earnings call Thursday announcing fiscal-year results, Mr. Iger revealed the service’s name for the first time: Disney+.

Despite Mr. Iger’s focus on the direct-to-consumer models of the future, it was some of Disney’s most traditional businesses—theme parks and movies—that drove the company to a record performance in its just-ended fiscal year.

As it has been for several quarters, Wall Street’s focus was on Disney’s future as a streaming competitor to Netflix, a strategy being replicated by its competitors. AT&T Inc., which earlier this year closed its purchase of Time Warner Inc., is pursuing a direct-to-consumer service featuring its HBO channel and other holdings. Tech firms such as Apple Inc. have moved aggressively into entertainment programming in recent months.

Disney is betting that its library of beloved characters and franchises will be enough to lure consumers who are already paying monthly subscriptions to Netflix or maintaining their cable packages.

The company has said that its service, set to launch in late 2019, will feature programming that includes new “Star Wars” series from its Lucasfilm division and superhero spinoffs from Marvel Studios. Disney’s other two entertainment divisions—Disney Animation and Pixar Animation—will be represented on the service, as well as programming from National Geographic, which Disney will acquire as part of the Fox deal.

“It will be very brand-centric,” said Mr. Iger.

Disney has announced programming for the newly dubbed Disney+ piecemeal, and more information is coming: the company said it would host investors in April for a presentation of its streaming-service plans. A website promoting the service went live during Thursday’s earning call.

In addition to its Disney-branded service, the company will also manage ESPN+, released earlier this year after several quarters of sagging subscription numbers for ESPN’s cable channel, and Hulu, over which it is gaining majority control in the Fox deal.

The Disney-Fox deal will reduce the number of major Hollywood studios to five from six. Disney will be producing some movies exclusively for its streaming service, while also distributing features with traditional theatrical releases; but Mr. Iger said he has no plans to shorten the “window” of time between a movie’s theatrical debut and its availability in the home.

Earlier this week, the antitrust authority of the European Union approved the Disney-Fox tie-up, though some international jurisdictions have yet to weigh in.

The $71.3 billion price tag on the deal is expected to shrink by more than $20 billion with the sale of Fox’s stake in European pay-TV operator Sky PLC to Comcast Corp. and a Justice Department mandate to sell off Fox’s regional sports networks. Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

Despite losing the Sky stake to Comcast, Disney will roll out Disney+ in Europe, Mr. Iger said, and the company plans to introduce Hulu to more foreign markets once it assumes majority control.

Profit for the three months ended Sept. 29 rose 33% to $2.32 billion, or $1.55 a share, while revenue rose 12% to $14.31 billion. Excluding one-time items, Disney earned $1.48 a share.

Analysts surveyed by FactSet expected $1.34 a share in adjusted profit on $13.73 billion in revenue.

For the year, Disney reported a record annual profit of $12.6 billion on $59.43 billion in revenue, compared with a profit of $8.98 billion and $55.14 billion in revenue a year earlier.

Disney has released five of the 10 highest-grossing movies of 2018; its fiscal year, which ended Sept. 29, included gargantuan hits such as “Black Panther,” “Avengers: Infinity War” and “The Incredibles 2,” three movies that alone collected nearly $2 billion in ticket sales in the U.S. and Canada. Operating income for Disney’s studio-entertainment division rose 27% from last year.

Disney’s parks-and-resorts division saw operating income climb 18% as attendance and prices continued to rise at its domestic locations.

Disney also said it was taking a $157 million impairment charge on its investment in Vice Media, which is planning to cut its workforce by as much as 15% to combat stalling growth.

Write to Erich Schwartzel at erich.schwartzel@wsj.com and Maria Armental at maria.armental@wsj.com

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Oil extends slide from 7 percent slump the day before as outlook darkens

SINGAPORE (Reuters) – Oil markets slipped again on Wednesday, extending losses from a 7 percent plunge the previous session as surging supply and the specter of faltering demand scared off investors. FILE PHOTO: Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well…

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Oil extends slide from 7 percent slump the day before as outlook darkens

SINGAPORE (Reuters) – Oil markets slipped again on Wednesday, extending losses from a 7 percent plunge the previous session as surging supply and the specter of faltering demand scared off investors.

FILE PHOTO: Oil pours out of a spout from Edwin Drake’s original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. REUTERS/Brendan McDermid/File Photo

U.S. West Texas Intermediate (WTI) crude oil futures were at $55.50 per barrel at 0514 GMT, down 19 cents from their last settlement.

International benchmark Brent crude oil futures LCOc1 were down 22 cents at $65.25 per barrel.

Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since prices collapsed in 2014.

The slump in spot prices has turned the entire forward curve for crude oil upside down.

Spot prices in September were significantly higher than those for later delivery, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage.

By mid-November, the curve had flipped into contango, when crude prices for immediate delivery are cheaper than those for later dispatch. That implies an oversupplied market as it makes it attractive to store oil for later sale.

Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown.

U.S. crude oil output from its seven major shale basins is expected to hit a record of 7.94 million barrels per day (bpd) in December, the U.S. Department of Energy’s Energy Information Administration (EIA) said on Tuesday.

That surge in onshore output has helped overall U.S. crude production C-OUT-T-EIA hit a record 11.6 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.

Most analysts expect U.S. output to climb above 12 million bpd within the first half of 2019.

“This will, in our view, cap any upside above $85 per barrel (for oil prices),” said Jon Andersson, head of commodities at Vontobel Asset Management.

The surge in U.S. production is contributing to rising stockpiles.

U.S. crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million as refineries cut output, data from industry group the American Petroleum Institute showed on Tuesday.

The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) has been watching the jump in supply and price slump with concern.

OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.

“OPEC and Russia are under pressure to reduce current production levels, which is a decision that we expect to be taken at the next OPEC meeting on Dec. 6,” said Andersson.

That puts OPEC on a collision course with U.S. President Donald Trump, who publicly supports low oil prices and who has called on OPEC not to cut production.

Reporting by Henning Gloystein; Editing by Joseph Radford

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1.1 million Marylanders expected to travel for Thanksgiving

More than 1.1 million Marylanders will travel for the Thanksgiving holiday weekend, the most in more than a dozen years, according to AAA Mid-Atlantic projections.It’s the fourth straight year the auto club has projected Thanksgiving travel volumes of more than 1 million people in Maryland. Roughly one in every six state residents are expected to…

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More than 1.1 million Marylanders will travel for the Thanksgiving holiday weekend, the most in more than a dozen years, according to AAA Mid-Atlantic projections.

It’s the fourth straight year the auto club has projected Thanksgiving travel volumes of more than 1 million people in Maryland. Roughly one in every six state residents are expected to go away between Wednesday and Sunday of the holiday weekend.

“As the economy continues to grow, along with wages, disposable income and household wealth, many Marylanders are feeling enough confidence to not hold back on spending, which is evident by this year’s robust holiday travel forecast,” AAA Mid-Atlantic spokeswoman Ragina Cooper Averella said in a statement.

Most will drive, and low gas prices could be playing a role in their decision, she said.

After hitting a high of $2.99 per gallon of regular unleaded gasoline over Memorial Day weekend, the average price at the pump in Maryland had fallen to $2.37 as of Tuesday, according to AAA.

Prices have fallen 30 cents in the last month and 7 cents in the past week. The current average is within 5 cents of the lowest price this year, set March 9.

“Prices could drop even lower, especially if there is a surge in gasoline production after refiners fully restart units from the fall maintenance season, and oil prices continue to remain stable,” Averella said.

If possible, the 91 percent of travelers who are driving to their destinations should try to avoid the early evening commute period next week, which is expected to be the most congested, according to AAA, which worked with INRIX, a global mobility analytics company, on its projections. Sunday is expected to be busy, too.

To avoid the gridlock, Troy Brad, 30, of Glen Burnie, plans to leave for Virginia before sunrise Wednesday, between 5 and 6 a.m.

He’ll spend Thanksgiving with his children and his mother’s and sister’s households, about a dozen family members in total, at a time-share in Massanutten, Va., they bought this summer.

“The whole wolf pack,” Brad called his crew. “It’s going to be a nice family event.”

Kristina Turner will be one of more than 82,000 Marylanders expected to fly for Thanksgiving — although she is taking a little longer than a holiday weekend for her trip.

The 24-year-old, who lives in Baltimore’s Mount Vernon neighborhood, is headed to Portugal Tuesday for a three-week trip to Barcelona, Paris, London and Brussels with her boyfriend, Sergeant First Class Marion Brawley, during his time off from his deployment in Afghanistan, she said.

Turner said she is more excited to see Brawley than she is worried about long wait times at Baltimore/Washington International Thurgood Marshall Airport.

“It’s overdue!” she said.

Nearly 22,000 are expected to travel by train, bus, boat or other mode of transportation, which is roughly flat compared with last year, AAA said.

cmcampbell@baltsun.com

twitter.com/cmcampbell6

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Japan’s Economy Shrank in July-September as Trade Falls

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