Here's what the company reported compared with what Wall Street expected, according to Thomson Reuters consensus estimates:
The stock fell nearly 2 percent in after-hours trading.
Disney's cable business, which falls under its media and networks segment, reported operating income of $1.79 billion. That figure comes in below Street expectations for about $1.85 billion, according to a StreetAccount consensus estimate.
The company said the 3 percent year-over-year decrease in operating income was primarily driven by ESPN's higher programming costs. Disney said, however, that the decline was "partially offset by affiliate and advertising revenue growth."
Disney Chairman and CEO Bob Iger again defended the sports network, saying the company is "confident in ESPN's future."
"Live sports is still a huge driver of consumption," Iger said on CNBC's "Closing Bell."
Disney is seeing "significant growth" in the number of subscribers to streaming services and other platforms that provide alternatives to traditional paid TV, the longtime CEO said. However, "so far, it's not enough to make up for some of the losses on traditional [TV platforms]," he said.
In a call with analysts on Tuesday, Iger reiterated Disney's bullish outlook on streaming services.
"Right now, they are a small part of the pay TV universe, but we believe they'll be a much bigger part of the business going forward. And from a per sub pricing standpoint, these new services are just as valuable to us as traditional platforms," he said.
Iger remained optimistic, saying that these alternative services are still relatively brand new. The Disney CEO said he believes subscribers to these platforms will eventually balance out the cord-cutting behavior.
The cable segment has typically brought in about 30 percent of Disney's total revenue. In late April, ESPN said it would lay off 100 people as the sports network cuts costs and adapts itself to digital distribution.
Disney's studio segment bested Wall Street's optimistic expectations, reporting operating income that grew 21 percent year over year. The company credited a strong performance by "Beauty in the Beast," which has crossed $1 billion in the global box office.
Here's what Disney reported as operating income for each segment, compared with analysts' expectations, according to StreetAccount consensus estimates:
In March, Disney's board announced it was extending Iger's contract to July 2, 2019. The company has not yet named a successor for Iger.
When CNBC asked the Disney CEO if he'd run for office, Iger said he hasn't thought much about what he will do when he leaves the company.
Here's how much revenue each segment brought in compared with what analysts projected, according to StreetAccount consensus estimates: