The Walt Disney Company continues to flail unsuccessfully in search of earnings growth any which way it can. Attendances both at its theme parks and summer movie releases have been poor, while disappointing ratings and sharply reduced adspend have hit its ABC TV network.
In a conference call to analysts, Disney’s utterances seemed better suited to the confessional. Chief financial officer Tom Staggs reported a 26% drop in operating income in the group’s fiscal third quarter, with theme parks shedding 17% to $467 million (€4.73m; £2.97m). Worse yet, current bookings for Q4 are down 10% on the equivalent period last year. “We wanted to give advance warning of a thing like that,” said Staggs.
At Disney’s media networks division (ABC and cable properties), operating income for the quarter was down 40% to $288 million, due to lower advertising income.
In reply to a question about growth prospects for 2002, Staggs was ambivalent. “The economy is sending such mixed signals,” he hedged, adding later he thought it would be “positive”. When pushed to quantify that terminology, Staggs declined on the grounds that it would be “perilous to predict specific numbers.”
However, he did unveil the vital statistics for the quarter to June 30. Group operating income was $828 million, down year-on-year from $1.1bn; net income was down 7.1% from $392m to $364m (18 cents a share from 19 cents); while revenue was down 2.8% from $5.96bn to $5.8bn.
Data sourced from: New York Times; additional content by WARC staff