WALT DISNEY - DISNEY CAUGHT UP IN DOWNTURN

DISNEY CAUGHT UP IN DOWNTURN

The Walt Disney company, which has resisted the economic downturn withgreater strength than most other media conglomerates -- its stock hasdropped only about 25 percent over the rocky past two months, while othermedia companies' have plunged 40-60 percent -- startled investors Thursdaywhen it disclosed that its fourth-quarter net income had dropped 13 percentand that it expected even worse results next year. Disney said that its netincome for the quarter totaled $760 million, down from $877 million in theyear-ago period. Almost every Disney unit reported disappointing results.Its movie studio was particularly hard hit with operating income down 42percent from last year as films like Swing Vote and Miracle at St.Anna turned out to be duds. Revenue plunged at Disney's ABC and ESPNnetworks and its television stations as some of their biggest ad buyers --particularly automotive, financial services and consumer electronicscompanies -- retrenched. To make matters worse, ABC's programs have lost 20percent of their audience of 18-49 year-old adults since the beginning ofthe season. Revenue was virtually flat at its theme parks, which account for30 percent of its revenue, but the company said it expected a sharp drop inattendance in the coming months, judging from a 10-percent fall-off inbookings at its resorts, and on Thursday began offering discount deals todraw visitors. In a conference call, Disney chief Robert Iger made noattempt to play down the company's anticipated trouble. "Consumer confidenceis the lowest we've seen in over three decades," he said.

07/11/2008