Disney's 3rd-Qtr. Profits Falls 3.2%; Film Revenues Rise 8%2 Aug, 2001 By: Hive News
Walt Disney Co. reported fiscal third-quarter profit fell 3.2% because of lower TV ad sales and attendance at the Disney World parks in Florida, according to Bloomberg News.
Disney said profit fromoperations in the period ended June 30 fell to $479 million, or 23 cents a share,from $495 million, or 23 cents, a year earlier. Revenue dropped 1.3% to$5.98 billion from $6.05 billion, the company said in a statement. Results areadjusted for acquisitions and closing some businesses, said Bloomberg.
The biggest decline was at the networks division, including ABC and ESPN. Profit at the unit fell 29% in part because of a 20% decline in ratings at ABC. Profit at the theme parks unit slipped 1% as a slower U.S. economy hurt attendance.
Disney said it's on track to cut 4,000 jobs, which willgenerate more than $350 million in annual savings.
"Disney is taking real actions to improve its earnings prospects," JordanRohan, an analyst at Wit SoundView, told Bloomberg."They are making significant cost-cutting initiatives and should be rewarded by investors."
The profit topped the average estimate of 21 cents a share from polled analysts.
The company still expects to have percentage growth in earnings per share "inthe single digits," c.f.o. Thomas Staggs said on a conference call.
Disney president Robert Iger said on the call that the company isn't seeing anyimprovement yet in the advertising market. The company expects to field a stronger programming lineup at ABC for the new TV season starting next month.
Revenue at Disney's media networks unit, which includes ABC, fell 6% to $2.14 billion. Operating income fell 29% to $470 million.
At the studio entertainment unit, which includes Disney's movie studios, revenue rose 8% to $1.34 billion. Profit was $65 million, compared with a loss of $1 million a year ago.
Disney said the new releases Pearl Harbor, Spy Kids and Atlantis: The Lost Empire boosted results.
At Disney's Internet group, sales declined 17% to $38 million and the operating loss narrowed to $31 million from $58 million.
Disney's overall net income fell to $392 million, or 19 cents a share, from $530million, or 25 cents, a year earlier, according to Bloomberg.