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Reuters
Disney profit drops
Thursday November 17, 8:34 pm ET
By Gina Keating
LOS ANGELES (Reuters) - Walt Disney Co (NYSE
IS - News) on Thursday reported a 27 percent drop in fourth-quarter profit, weighed down by weak U.S. performances from movies including "Proof" and "Dark Water," and soft DVD sales.
Disney's media networks division, which includes cable sports channel ESPN and broadcaster ABC, posted a jump in earnings. Its parks and resorts business also showed improvement.
Shares fell more than 2 percent in light trade after the company posted a drop in net income to $379 million or 19 cents per share, including the effect of stock options expensing, in the fiscal fourth quarter ended October 1, from $516 million or 25 cents per share a year ago.
Revenues rose to $7.734 billion from $7.543 billion a year earlier.
Excluding stock based compensation charges and the net effect of income tax benefits and other items, Disney posted a profit of 20 cents per share, topping the Wall Street consensus by 2 cents, according to Reuters Estimates.
But revenue missed the consensus estimate of $7.8 billion.
"Overall, I'm pleased with what they did on the bottom line," Sanders Morris Harris analyst David Miller said. But he said he would have preferred to see Disney surpass earnings expectations through growth of its underlying businesses rather than one-time items. That factor could be depressing shares in after-hours trade, he added.
Disney's movie studio posted an operating loss of $313 million in the quarter, versus a profit of $23 million a year earlier, weighed down by poor performances by its Miramax unit and slow DVD sales.
Media networks, which includes ABC television and ESPN, saw a 41 percent rise in profit to $632 million, Parks and Resorts profit rose 10 percent to $309 million, while the consumer products division profit fell 10 percent to $132 million.
On a conference call with analysts on Thursday, Chief Financial Officer Tom Staggs said Disney expected to deliver double-digit earnings growth in 2006.
He said growth in fiscal 2006 would be "heavily weighted toward the latter half of the year" due to the timing of theatrical and home video releases and deferred recognition of about $100 million in affiliate revenue at ESPN.
Media networks were again expected to post solid growth in 2006, supported by ads sales for successful ABC series like "Lost" and "Desperate Housewives" and growing affiliate fees at its cable networks, Staggs said.
Staggs called the studio division's results disappointing, but said the company was optimistic about the 2006 film slate, which includes the highly anticipated "The Chronicles of Narnia: The Lion, The Witch and the Wardrobe," Pixar Animation Studio's (NasdaqNM
IXR - News) "Cars" and the "Pirates of the Caribbean: Dead Man's Chest."
Disney said the parks division would do better in 2006 thanks to a full year of operation of Hong Kong Disneyland. Start-up costs for the park also weighed on 2005 results. The company predicted general strength in tourism and maintained its view that Parks would achieve a 20-percent profit margin by 2008.
During the quarter, Disney shares traded between $26.38 and $23.22. Disney stock traded on Thursday at 18 times estimated 2006 earnings, compared with an average of 16 times earnings for the Dow Jones Industrial Average companies and 20 times earnings for Time Warner Inc. (NYSE:TWX - News), according to Reuters Estimates.
Shares of Disney fell 67 cents or 2.6 percent to $25.32 in after hours trade on Inet.
Disney profit drops
Thursday November 17, 8:34 pm ET
By Gina Keating
LOS ANGELES (Reuters) - Walt Disney Co (NYSE
IS - News) on Thursday reported a 27 percent drop in fourth-quarter profit, weighed down by weak U.S. performances from movies including "Proof" and "Dark Water," and soft DVD sales.Disney's media networks division, which includes cable sports channel ESPN and broadcaster ABC, posted a jump in earnings. Its parks and resorts business also showed improvement.
Shares fell more than 2 percent in light trade after the company posted a drop in net income to $379 million or 19 cents per share, including the effect of stock options expensing, in the fiscal fourth quarter ended October 1, from $516 million or 25 cents per share a year ago.
Revenues rose to $7.734 billion from $7.543 billion a year earlier.
Excluding stock based compensation charges and the net effect of income tax benefits and other items, Disney posted a profit of 20 cents per share, topping the Wall Street consensus by 2 cents, according to Reuters Estimates.
But revenue missed the consensus estimate of $7.8 billion.
"Overall, I'm pleased with what they did on the bottom line," Sanders Morris Harris analyst David Miller said. But he said he would have preferred to see Disney surpass earnings expectations through growth of its underlying businesses rather than one-time items. That factor could be depressing shares in after-hours trade, he added.
Disney's movie studio posted an operating loss of $313 million in the quarter, versus a profit of $23 million a year earlier, weighed down by poor performances by its Miramax unit and slow DVD sales.
Media networks, which includes ABC television and ESPN, saw a 41 percent rise in profit to $632 million, Parks and Resorts profit rose 10 percent to $309 million, while the consumer products division profit fell 10 percent to $132 million.
On a conference call with analysts on Thursday, Chief Financial Officer Tom Staggs said Disney expected to deliver double-digit earnings growth in 2006.
He said growth in fiscal 2006 would be "heavily weighted toward the latter half of the year" due to the timing of theatrical and home video releases and deferred recognition of about $100 million in affiliate revenue at ESPN.
Media networks were again expected to post solid growth in 2006, supported by ads sales for successful ABC series like "Lost" and "Desperate Housewives" and growing affiliate fees at its cable networks, Staggs said.
Staggs called the studio division's results disappointing, but said the company was optimistic about the 2006 film slate, which includes the highly anticipated "The Chronicles of Narnia: The Lion, The Witch and the Wardrobe," Pixar Animation Studio's (NasdaqNM
IXR - News) "Cars" and the "Pirates of the Caribbean: Dead Man's Chest."Disney said the parks division would do better in 2006 thanks to a full year of operation of Hong Kong Disneyland. Start-up costs for the park also weighed on 2005 results. The company predicted general strength in tourism and maintained its view that Parks would achieve a 20-percent profit margin by 2008.
During the quarter, Disney shares traded between $26.38 and $23.22. Disney stock traded on Thursday at 18 times estimated 2006 earnings, compared with an average of 16 times earnings for the Dow Jones Industrial Average companies and 20 times earnings for Time Warner Inc. (NYSE:TWX - News), according to Reuters Estimates.
Shares of Disney fell 67 cents or 2.6 percent to $25.32 in after hours trade on Inet.
