Profit Drops 26 Percent at Disney

BURBANK: The weakened ad market and decreases in home-entertainment and TV distribution revenues took a toll on The Walt Disney Company’s results in the third quarter, with profit falling 26 percent to $954 million on revenues that were 7-percent lower at $8.6 billion.

"While the tough global economy impacted our performance in the quarter, we remain encouraged by the relative strength of our business," said Robert A. Iger, president and CEO. "That strength is the result of Disney’s combination of strong brands, consistent business strategy and the steps we’ve taken to make our business more efficient without sacrificing quality."

Media networks revenues fell 2 percent to $3.96 billion, with cable revenues stable at $2.6 billion and broadcasting revenues down 4 percent to $1.4 billion. Operating income at the cable networks fell 8 percent to $1.1 billion, while in the broadcasting division operating income was down 34 percent to $204 million. Overall media networks operating income fell 13 percent $1.3 billion.

The studio entertainment division posted a $12 million loss, as compared with the year-ago profit of $97 million, and revenues fell 12 percent to $1.3 billion. The segment was hurt by a decrease in worldwide home entertainment and TV distribution, due in part to difficult comparisons with the year-ago quarter.

Parks and resorts experienced a 9-percent revenue decrease to $2.8 billion, while operating income fell 19 percent to $521 million. Consumer products revenues were down 10 percent to $510 million, with a profit of $96 million (a 37 percent drop). Revenues from interactive media decreased 20 percent to $113 million, but the segment narrowed its loss to $75 million.

The company recorded $21 million in restructuring and impairment charges in the quarter, primarily as a result of severance costs.