Disney Sees 46% Drop In Net Income

Broadcast remains hindered while cable prospers
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Disney Co. reported a 46% drop in net income today to $613 million for the fiscal second quarter. The earnings underlined the stark differences between company’s cable and broadcasting units.

The company’s media networks unit saw a 4% drop in overall operating income to $1.3 billion for the quarter and a 2% increase in revenue to $3.6 billion.

Operating income at the broadcasting unit dropped 38% to $162 million for the quarter, while cable networks increased by 5% to $1.1 billion.

ESPN saw ad revenue fall, but was helped by higher affiliate revenue. ABC Family saw ad growth and higher affiliate contributions.

In broadcasting, the company said attributed the 38% drop in operating income to higher programming costs at ABC and lower ad sales at the owned TV stations.

The company’s interactive media unit, which will house its new stake in online video venture Hulu alongside its interactive studio, was also hurt reporting a $61 million loss for the period.  A 17% decline in revenue was explained by lower sales of self published video games.

Total operating income was down 29% to $1.526 million.

The company recorded $305 million in charges, which included a write down of $203 million, partially related to radio licenses and an investment in an Indian media company.  Restructuring costs of $102 million were related to lay-offs, according to the statement. 

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