Broadcast Drags Disney Down

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Revenue and earnings fell at The Walt Disney Co. in its fiscal third quarter,
dragged down by poor performance at broadcast networks and a weak advertising
market.

The company also reduced its estimates for the fourth quarter.

Overall revenue was down 3 percent in the period to $5.8 billion and segment
operating income was off 26 percent.

'The quarter was hampered by some external factors and some performance
issues that we are addressing. However, over the longer term, the Disney recipe
of high-quality content leveraged across a broad range of businesses forms the
foundation of future growth,' chairman Michael Eisner said in a prepared
statement.

While most of the losses were attributed to the company's broadcast networks
-- where operating income fell 69 percent and revenue was off 16 percent -- its
cable properties didn't fare much better.

In its cable-networks segment -- which includes ABC Family, Disney Channel,
ESPN and SoapNet -- revenue rose 1 percent to $923 million but operating income
declined 12 percent to $212 million.

Disney said it expects 'earnings and earnings per share for the fourth
quarter will likely be somewhat lower than prior-year pro forma amounts' due to
softness in travel and tourism and the economy in general.

In a prepared statement, Disney said revenue and operating income at the
cable networks was affected by higher uncollectable accounts from Adelphia
Communications Corp. in the United States and Kirch Media GmbH & Co. in
Germany, both of which have filed for bankruptcy protection.

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