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Disney Profits Fall 46% But Beat Targets (Update)

Disney reports a 46% decline in earnings, hurt by poor results from its studio unit.
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Updated from 4:25 p.m.


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reported a 46% decline in second-quarter earnings, hurt by a steep falloff in its studio business, but nonetheless topped Wall Street profit forecasts.

In a press release after the bell, the Burbank, Calif., entertainment concern reported net income of $613 million, or 33 cents share, down from the year-ago period's $1.13 billion, or 58 cents a share.

Excluding restructuring and impairment charges that cut 10 cents from its most recent EPS figure, Disney said quarterly earnings fell 26% to 43 cents a share from 58 cents a share a year ago.

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Analysts were looking for earnings of 40 cents a share in the quarter, according to Thomson Financial.

Disney said revenue slid 7% to $8.1 billion from $8.7 billion a year ago.

The company's results were hurt most by its studio division, where revenue tumbled 21% year-over-year on weaker unit sales of DVDs and several disappointing theatrical releases. Operating income at the studio was decimated, falling 97% to $13 million on rising production expenses for films not yet released.

Theme parks and resorts also performed relatively poorly, with revenue sliding 12% to $2.4 billion from $2.73 billion a year ago -- declines the company attributed to decreased spending by guests on merchandise and a cut in the price of tickets at Disneyland during the quarter.

The company's biggest segment by revenue -- media networks -- eeked out year-over-year growth of 2%, rising to $3.62 billion from $3.55 billion. The company cited higher affiliate revenue at ESPN, ABC Family and the domestic Disney Channel, which offset a decline in advertising revenue.

Disney shares moved higher in after-market trading Tuesday, changing hands recently at 23.93, up 78 cents, or 3.5%.

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