Disney’s Fiscal Q2 Profit Drops 46%
Walt Disney’s fiscal second-quarter profit fell 46%, with a slight drop in earnings from its media networks unit overshadowed by plunging profit from its studio entertainment and parks and resorts operations.
Disney’s operating profit from media networks for the quarter ended March 28 fell 4% to $1.31 billion, despite a 2% increase in sales, the company said in a statement today.
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Cable networks such as ESPN and ABC Family had a 5% increase in operating income, while Disney’s ABC broadcasting unit had a 38% drop in operating profit from a year earlier.
While sales at ABC Studios for shows such as “Ugly Betty” and “Desperate Housewives” rose, overall advertising sales for the network fell while costs increased from a year earlier, when production was down because of the Writers Guild of America strike. ABC’s losses offset gains from higher advertising and affiliate revenue for ABC Family and higher affiliate sales at ESPN, Disney said.
Overall, Disney said its earnings fell to $613 million, or 33 cents a share, from $1.13 billion, or 58 cents, a year earlier, as revenue fell 7.2% to $8.09 billion. The company was expected to earn 40 cents a share on $8.15 billion in sales, the average analyst estimates in a Thomson Reuters survey. Profit fell largely on a decline in theatrical and DVD sales that caused a 97% drop in operating profit from Disney’s studio entertainment operations from a year earlier.
While Disney’s broadcasting revenue was down 2% from a year earlier, advertising sales at ABC Television Networks dropped about 30% because of year-earlier political spending. ABC TV’s ad sales for the fiscal first quarter were down about 28%, the company said on a conference call with analysts today.