WALT DISNEY - DISNEY PROFITS PLUNGE 26 PERCENT

DISNEY PROFITS PLUNGE 26 PERCENT

Add the Walt Disney Co. to the list of media conglomerates reporting big second-quarter losses. Its profit fell 26 percent in the quarter, but analysts noted that it was expected to report an even sharper decline and that in fact the tumble was less severe than it had been over the previous year or so. In a conference call with reporters and analysts, Disney chief Robert Iger said that the company has begun to "see signs of economic stability" but that a cloud of uncertainty hangs over them. For example, attendance was up slightly at its theme parks, which nevertheless reported a 19-percent decline. While that was below the 50-percent plunge in the previous quarter, it was attributed to a number of special promotions and discount pricing as well as the fact that the Easter holiday fell within the quarter. More troublesome, the company's movie unit experienced an operating loss for the first time in four years despite the huge success of Up from its Pixar unit. Underscoring the soundness of the Pixar acquisition, analysts noted that the rest of Disney's releases in the quarter had mostly failed to generate big ticket sales. Disney ABC broadcast network and ESPN cable network also took a hit as well as its owned stations. "The local ad market remains soft," CFO Tom Staggs remarked during the conference call. In reporting the results, the New York Times commented, "If the Walt Disney Company, with its vast theme park operations and television advertising business, is a bellwether for swaths of the economy, third-quarter earnings do not bode well for a recovery."

31/07/2009