Disney Financial Losses

[Otter49]

Disney CFO sees 4th Quarter loss in film division of $250M - $300M.

Stock is tanking.

 

[raidermatt]

More detail, from cbsmarketwatch.com.

Disney reiterates earnings growth target (DIS) By David B. Wilkerson
SAN FRANCISCO (MarketWatch) -- Walt Disney Co. (DIS) Chief Financial Officer Thomas Staggs told investors Wednesday that the company still expects to post double-digit earnings growth in fiscal 2005 compared to the previous year. Despite an estimated fiscal fourth-quarter loss of as much as $300 million at its studio operations, improved ratings and advertising revenue at ABC and ESPN will help to bolster results, Staggs said. He cautioned that the company's growth projection excludes the possibility of having to write off its investment in Delta Airlines, which includes $100 million in airplane leases, given Delta's current financial problems. In other remarks at the Merrill Lynch Media & Entertainment Conference, Staggs said Disney has not seen any meaningful impact from Hurricane Katrina, but will "continue to monitor and assess" any potential impact.

Disney's stock closed down 70 cents, to $24.11. A decline of 2.8%.

The DJIA as a whole closed down $52.54, a decline of 0.5%.

 

[DoxaRich]

It's good that Disney is a diverse corparation. Couple years ago Disney did about 2 billion at the boxoffice but ABC was in the toilet. Now ABC is starting to make some money. Disney is nothing more then one big mutual fund.

Tommorrow, the stock will probably climb above todays open. What's the old adage ..... Sell on the good news, buy on the bad.

 

[raidermatt]

More detail on the issue, with discussion points from Katzenberg, who at least puts partial blame on the quality of films from the studios.

Disney warns of $250m losses this quarter
By Christopher Parkes FT.com, 21:25 BST Sep 14, 2005

Walt Disney's film studio will lose between $250m and $300m in the current quarter because of fading home video sales and a weak showing at the box office, Tom Staggs, chief financial officer, warned on Wednesday.

The dive into deficit underscores the malaise that has spread throughout Hollywood this year, and compares with the studio's $23m profit in the final quarter last year, and earnings of $205m in the comparable part of 2003.

Mr Staggs blamed the slump on flat domestic sales of DVDs and declining box office audiences, accentuated by the failure of recent cinema releases from Disney's Miramax subsidiary.

Addressing a Merrill Lynch conference for investment analysts, he said that while overseas DVD sales continued to increase, prices were falling. Mounting competition had also had an impact, as Jeffrey Katzenberg, chief executive of DreamWorks Animation, remarked earlier in the day.

Some 6,000 new DVD titles were released in the US in the first half of this year, compared with 11,000 in the whole of 2004, he said, and retail outlets were "jammed with product".

Mr Katzenberg suggested the decline in cinema attendance was partly due to the poor quality of films released this year, which he said was a cyclical phenomenon. But he also suggested cinema owners might help, warning that for many, poorly-behaved audiences had "degraded" the cinema experience for fans. The popularity of big-screen plasma and LCD television screens for home viewing offered serious competition to conventional theatres, he said.

DreamWorks, a small studio specialising in computer-generated films – notably the Shrek series and this year's hit, Madagascar – has issued a series of warnings and disappointing results in its first year since going public last October.

Mr Staggs noted that 70 per cent of a new disc's ultimate sales now occurred in the first two weeks of release.

This weakness of this year's theatrical releases could make 2006 another difficult year for studios, which have come to depend on home video sales for the bulk of their profits.

Mr Katzenberg suggested that the planned introduction of a new high-definition DVD system – which has led to a bitter battle over the preferred format between Toshiba and Sony – might be delayed or slowed.

Consumers were still buying an average 9.5 discs a year, and building up their film collections, and were not ready for a new platform this year or next, he said.

"I think the manufacturers understand this now."

 

[Above_the_Rim]

A lot of this relates with a topic I Got on here about the current decline of Disney, but we got peopel like PEter who dont see it

 

[DoxaRich]

Don't rag on Peter. We all have our opinions.

 

[Above_the_Rim]

Don't rag on Peter. We all have our opinions.

Yeah I know, sorry, I wasn't trying to be mean in the way I said it. I think he knows I'm not ragging on him