Lend This Disney Coverage Your Ear

Disney(DIS Quote - Cramer on DIS - Stock Picks) looked to impress Tuesday night, with its report of hopped up first-quarter earnings, which in this slower economic environment was quite impressive.

But today, in a form of "same church, different pew," rather than overstating the positives, the business press overstated the negatives in the report. An unwary investor who read a batch of headlines and articles about the company's earnings this morning, while left with a sense that the company outperformed expectations, would unfortunately end up believing that the Burbank-based company saw straight-up profit declines on a year-over-year basis.

Not so. Mickey Mouse's operation, which is obviously no Mickey Mouse operation, deserves full credit.

But the Associated Press, like several other outlets, did not grant the company that. This headline turned The Business Press Maven into Grumpy: "Disney Posts Lower 1Q Profit; Revenue Up."

Even our own TheStreet.com made me feel like I was locked in a Dead Man's Chest, by running with "Disney Profit Slides, But Beats." In the end, I might be willing to overlook a headline that did not factor in one-time sales gains in the comparative number, but here is the lead:

"Disney on Tuesday reported a decline in first-quarter profits that nevertheless beat expectations and pleased investors on a dark day for the broader stock market."

This treatment gives the sense that the company beat expectations and pleased ... even on a pit-poor day for the stock market, but the news was even better than that.

Disney's profit slide is only a technical matter. The sales gains were one-time and will not repeat. On an ongoing operational basis, Disney aced this test of its performance in more difficult economic times. But it's not until the third paragraph (a lifetime when it comes to what busy investors read) that we get the essential elements of last year's one-time sales gains that makes the comparison (and resulting slide/decline) all but irrelevant. Explained TheStreet:

"Excluding one-time items, like the sale of its interest in US Weekly magazine and the E! Entertainment channel, Disney's earnings rose by 29% to 63 cents a share from last year's 49 cents. On that basis, analysts on Wall Street were forecasting earnings of 52 cents a share, according to consensus estimates reported by Thomson Financial."

Look how much different, how even more appropriately favorable Disney's impressive performance appears when the issue of those one-time gains is subordinated, as it should be.

Here's The Wall Street Journal headline, which rightly makes no mention of slides: "Disney Posts Upbeat Results, Sees No Slowdown."

Me? Well, I wouldn't have mentioned the net income drop in the first sentence, only because the gains gum things up. That's a bit subjective, though, and The Wall Street Journal acquitted itself quite nicely, thank you, by laying down a line of explanation right away:

"Walt Disney Co.'s fiscal first-quarter net income dropped 27% because of gains a year earlier, but the entertainment giant bucked the gloomy economic outlook with robust ad sales and the strong performance of its theme parks."

We are then treated to a fleshing out in the very next sentence, the article's second, leaving nothing to chance: "Last year's first-quarter results included gains from the company's sale of its share of the E! Entertainment channel and US Weekly magazine."

To the Business Press Maven's eye, Gina Keating over at Reuters did a pitch-perfect job, not even mentioning the next-to meaningless net income slide until halfway through the article. Here is her headline: "Disney profit beats Street, no sign economy hurts." And the masterful lead:

"Walt Disney Co's quarterly profit topped Wall Street targets as Disney World set attendance records and its TV and consumer businesses grew despite a turbulent U.S. economy, while executives said they were 'pretty optimistic.'"

Gina's story accurately reflects what investors need to know: This was really a top-notch report, with broad-based strength evidenced over several of the firm's businesses in a challenging environment. Let's not confuse it by featuring one-time nonsense too prominently. Gina -- and Disney -- The Business Press Maven genuflects in your general direction.

On a separate topic that picks up a thread of what we've been speaking about for close to a week now ... a $45 billion deal is big, but does that automatically mean that it is evidence of anything bigger than it is?

With typical modesty, I say, you gotta' be kidding. No matter where you stand on the prospect of Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks) and Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) competing against Google(GOOG Quote - Cramer on GOOG - Stock Picks) more effectively together than they have alone, it's rather farcical to think, as the Associated Press apparently does, that Microsoft's grab at Yahoo! says something large and wide about stock market confidence that, in a recession, online advertising will climb any mountain, ford any stream?

Don't hurt yourself following this overreaching lead:

"Microsoft's unsolicited bid for Yahoo underscores the strength of online advertising -- and the stock market's confidence that the relatively new industry can withstand an economic downturn."

Soon after that we hear about how the deal is a $45 billion testament to the online advertising market's resiliency. Uh, can't this be a $45 billion testament to one increasingly bureaucratic company's misplaced thought? Just wondering.