Disney Posts Profit Despite Downturn at Media Networks Arm

26 April 2002

Walt Disney Company exceeded analysts’ expectations for its fiscal second quarter (ending March 31), thanks to an upturn in visits to its theme parks and an unexpectedly stable performance from its weakened consumer products division.

The group swung to a net profit of $259 million (€289m; £178m) from a $567m loss in the same period last year (when it recorded charges of almost $1 billion, mostly connected with defunct online portal Go.com). Revenues, however, slipped 2.5% to $5.9bn.

Disney’s main concern is the performance of its media unit, which has suffered from the ad downturn and the slide in ratings at broadcast network ABC. Operating profits at this division slumped 39% in the quarter to $309m on a 9% fall in revenues to $2.2bn.

Disney president Robert Iger revealed his hope that ABC can achieve a “single-digit [year-on-year percentage] price increase” in May’s upfront season of ad sales, though he added that “from a ratings standpoint, we go into it in not a particularly strong position.”

Data sourced from: The Wall Street Journal Online; additional content by WARC staff