Yahoo TV

STORY: Walt Disney shares fell as much as 10% in Tuesday morning trading after the entertainment giant posted quarterly earnings that underwhelmed Wall Street.

While the company reported a surprise profit in the entertainment division of its streaming business, it saw a drop in its traditional TV business and a weaker box office.

Its Disney+ and Hulu streaming services reported a modest profit in the January to March period but, when combined with sports streamer ESPN+, the unit posted another loss.

CEO Bob Iger, who came out of retirement to revamp Disney, said the streaming operation is on track to be profitable by the end of September.

Meanwhile, revenue from its traditional television business declined 8% and operating profit fell 22% from a year ago.

The decline reflects lower ad revenue and the impact of Disney's new TV distribution deal with Charter Communications, which dropped eight of Disney's cable networks.

Disney continues to cut costs in some areas while it also unveiled a 10-year, $60 billion investment in theme parks after that division reported a 12% gain in operating income.

Disney said it expects full-year adjusted earnings per share to rise by 25%, up from a prior forecast of 20%, citing strength at theme parks and improvements in the streaming business.