Disney Revenue Down 8% - Broadcasting & Cable

Disney Revenue Down 8%

"Challenging" first quarter reflects recession's grip
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Disney's revenue in its first fiscal quarter was $9.6 billion, an 8% drop from the same quarter a year before. Segment operating income for the quarter dropped 26% to $1.4 billion. Diluted earnings per share (EPS) for the quarter, which ended Dec. 27, were $0.45, compared to $0.63 in the prior-year quarter.

"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," said Disney President/CEO Robert A. Iger. "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."

Revenue for Disney's Media Networks dropped 5% to $3.9 billion in the quarter. Operating income at Cable Networks decreased $69 million to $517 million for the quarter, driven by decreases at the domestic Disney Channels and 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," said Disney in a statement. "The decrease at ESPN was primarily due to lower advertising revenues and higher programming and administrative costs, partially offset by higher affiliate revenue."

Operating income in the Broadcasting sector decreased $205 million to $138 million for the quarter, as advertisers pulled back. Disney cited "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" as reasons for the drop. "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.

Disney's Parks and Resorts segment saw revenue drop 4% in the quarter to $2.7 billion, while Studio Entertainment was off 26% to $1.9 billion. Consumer Products jumped up 18% in the quarter to $773 million, and Interactive Media revenue climbed 13% to $313 million.

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