Disney net down 32% as studio entertainment revenues dip

MUMBAI: Walt Disney Company’s net income has dropped 32 per cent in the fiscal first quarter.

Studio Entertainment revenues for the quarter decreased 26 per cent to $1.9 billion and segment operating income decreased 64 per cent to $187 million. Lower segment operating income was primarily due to decreased DVD unit sales at worldwide home entertainment reflecting the strong performance of Pirates of the Caribbean: At World’s End, High School Musical 2, Jungle Book Platinum Release and Ratatouille in the prior-year quarter and lower catalog sales in the current quarter. Key current quarter releases included WALL-E, Sleeping Beauty Platinum Release, Tinker Bell and The Chronicles of Narnia: Prince Caspian.

For the quarter ended 27 Decemeber, Disney’s operating income fell 36 per cent to $ 1444 million as compared to $ 2248 million in the corresponding period last year.

Disney president and CEO Robert A Iger said, "We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn. We are forcefully confronting current circumstance while investing in the great creativity, brands and assets that are Disney’s strengths and keys to its long-term success."

Among the company’s units, revenues from consumer products witnessed an increase of 18 per cent to stand at $ 773 million viz-a-viz $ 654 million last year. The revenue increase was due to the acquisition of the Disney Stores North America.

Media Networks revenues for the quarter decreased five per cent to $3.9 billion and segment operating income decreased 29 per cent to $655 million. Operating income at Cable Networks decreased $69 million to $517 million for the quarter driven by decreases at the domestic Disney Channels and at ESPN. The decrease at the domestic Disney Channels was due to lower DVD sales reflecting the success of High School Musical 2 in the prior-year quarter.

Operating income at Broadcasting decreased $205 million to $138 million for the quarter primarily due to lower advertising revenue at the ABC Television Network and at the owned television stations and a bad debt charge in connection with the bankruptcy of a syndication customer. These decreases were partially offset by lower programming costs at the ABC Television Network due to a lower cost mix of programming including a shift of hours from primetime to news. The decrease in advertising revenues at the ABC Television Network was primarily due to lower primetime ratings.

Parks and Resorts revenues for the quarter decreased four per cent to $2.7 billion and segment operating income decreased 24 per cent to $382 million. Lower operating income was due to decreases at the domestic operations and at Disneyland Resort Paris.

Interactive Media revenues for the quarter increased 13 per cent to $313 million and segment operating income decreased $58 million to a loss of $45 million.

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