Disney Profit Drops 13 Percent

BURBANK, November 7: Like
several other major media companies this week, The Walt Disney Company has
reported a fall in its quarterly profits, which were down 13 percent to $760
million, despite a 6-percent rise in revenues to $9.4 billion.

Among the factors that
hurt the fourth-quarter results were a bad debt charge on a receivable from
Lehman Brothers, as well as lower results from the Studio Entertainment
segment.

The company also released
its full-year results, which showed a 7-percent increase in revenues to $37.8
billion, while profit fell 6 percent to $4.4 billion.

Disney's president and
CEO, Robert A. Iger, said he was "pleased" with the fiscal 2008
results, "especially in light of the challenging economic environment.
This is clearly a difficult and unpredictable time and while our businesses
aren't immune, the strength of our assets, brands and management team positions
us well for the long term."

At the Media Networks,
quarterly revenues gained 4 percent to $4.2 billion, with cable networks
revenues up 5 percent to $2.9 billion and broadcasting up 4 percent to $1.3
billion. In the fourth quarter, the networks delivered an operating income of
$1.1 billion, flat on the year-ago period, with an 11-percent gain to $1.2
billion at the cable networks offsetting a wider loss of $150 million in the
broadcasting segment. For the full year, Media Networks revenues gained 7
percent to $16.1 billion. There was a 10-percent increase to $10 billion for
the cable networks, while ABC and the stations group posted just a 2-percent
rise to $6.1 billion. Segment operating income for the Media Networks gained 11
percent to $4.8 billion, including $4.1 billion for the cable nets (up 15
percent) and $655 million for broadcasting, which was down by 6 percent.

Studio Entertainment
recorded revenue decreases in both the quarter, of 5 percent to $1.5 billion,
and the year, of 2 percent to $7.3 billion. Operating income took a hit in the
quarter, falling by 42 percent to $98 million, while for the year it was down 9
percent to $1.1 billion. For the year, the smaller profit was primarily due to a
decrease in domestic home entertainment, with the prior year including Pirates of the Caribbean: Dead Man’s Chest
and Cars. The quarter, meanwhile,
featured weaker performances from theatrical releases, as well as higher
marketing expenses for Beverly Hills
Chihuahua, released at the end of the period.

Parks and Resorts revenues
showed a 7-percent increase in the quarter to $3 billion, and an 8-percent rise
in the year to $11.5 billion. Operating income fell in the quarter, by 4
percent to $412 million, but posted an 11-percent gain in the year to $1.9
billion.

Consumer Products
revenues, meanwhile, gained 41 percent in the quarter to $812 million and 26
percent in the year to $2.9 billion. Operating income for the quarter was $176
million and for the year $718 billion, both showing a 14-percent increase.

—By Mansha Daswani