Disney profit drops 32% in quarter

[hobie16]

Walt Disney Co. reported a 32% drop in net income for its fiscal first quarter, with the company attributing the results to the recession's effect on its studio, television and parks.

Disney reported earnings of $845 million, or 45 cents a share, for the quarter ended Dec. 27, down from nearly $1.3 billion or 63 cents a year earlier. Revenue fell 8% to $9.6 billion.

"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," said Robert Iger, Disney's president and chief executive.

A decline in DVD sales hit the studio hard. Revenue for the quarter decreased 26% to $1.9 billion and operating income fell 64% to $187 million.

Parks and resorts were similarly affected. Revenue for the quarter fell 4% to $2.7 billion, but operating income decreased 24% to $382 million. The company cited a decline in attendance and hotel stays at Walt Disney World Resort in Orlando, Fla., and at Disneyland Resort in Anaheim, and lower operating income from its Disneyland Resort Paris.

Consumer products sales rose 18% to $773 million during the holiday season, although operating income was off 8% to $265 million.

Analysts surveyed by Thomson Reuters had expected, on average, earnings of 52 cents a share on revenue of $10.1 billion.

Disney's television divisions turned in disappointing numbers. Advertising revenue dropped sharply at the company's flagship ABC television network and its owned TV stations, primarily because of low prime-time ratings for the new fall launches. Operating income in the broadcasting division decreased $205 million to $138 million for the quarter.

Meanwhile, two longtime jewels in Disney's empire -- cable sports powerhouse ESPN and the Disney Channel -- also dulled during the quarter. ESPN suffered from a slow-down in advertising sales and higher programming costs, primarily its pricey NFL broadcast rights contract. The company said lower DVD sales for Disney Channel productions also dragged down earnings. Operating income at cable networks decreased $69 million to $517 million for the quarter.

Shares of Burbank-based Disney tumbled to $18.95 after hours on the earnings news. The stock had gained 42 cents to $20.62 in regular trading.

[Disneyguy85]

Oh well...

Whatever will be, will be...

Here's hoping that things start to get better for everyone.

[hobie16]

It may, or may not be a one quarter event. I had a conversation with a bellman at the local Marriott yesterday. He said December was their worst in memory averaging fifty cancellations per week. He said January picked up and February is also looking good.

Here's hoping...

[SlantedCastle]

a decline in DVD sales? gee maybe it's because they always seemed to be priced at $19.99 (higher at the parks) and never go on sale. There's no way I am spending that much on Wall-E!

Let's not get started on how much it costs for a park ticket. Crickie! Over $140 for a Park hopper??? Just because the name says "Disney" doesn't mean people will pay those prices. During this economic downturn, they should be lowering prices to attract more sales. It might be just me, but I tend to spend more when prices are lower.

[avenueqpat]

Well, if you move to Florida, you get to save on airfare and ticket prices, and depending on where you live, resort prices.

Disney can and should charge whatever they need to charge to support their business. If you can't afford it, then go to universal, and have a different experience. I personally would rather take a slightly shorter vacation and spend more money for something I will remember for a long time, with rides and employees that will leave me with good memories!

Besides, where else can you meet Princess Bell and Cinderella! :)