Disney Loses Ground On Ad Slump25 Apr, 2002 By: Joan Villa
The Walt Disney Company reported 2 percent higher revenues of $1.6 billion in its studio entertainment division for the second quarter ended Mar. 31, but posted a steep decline in operating income from $164 million to $27 million.
Declines in theatrical motion picture distribution and a drop in worldwide home video, due to fewer titles and higher marketing and distribution costs, the company said. The quarter's biggest releases were Snow Dogs and Peter Pan II: Return to Never Land, compared to last year's Lady and the Tramp II: Scamp's Adventure and Remember the Titans.
Over all, Disney's revenues declined 2 percent to $5.9 billion for the quarter and segment operating income was off 32 percent to $702 million. Net income beat analysts' estimates, however, climbing to $259 million for the quarter, compared to a net loss of $449 million adjusted to reflect the new goodwill and intangible asset accounting rules.
According to chairman and CEO Michael Eisner, “Our cost and capital containment efforts have helped us manage through the economic downturn even as we further develop and strengthen our core brands and maintain or increase market share across most of our businesses.”