Walt Disney Revenue Falls in Latest Quarter

1:26 PM PST 11/11/2010 by Paul Bond

Two months after a Disney employee pleaded guilty to trying to sell early access to quarterly earnings, the company said it is investigating the leak of its fiscal fourth-quarter results.

Disney was set to release its financial results Thursday after the close of regular trading on Wall Street, but did so about 16 minutes early because some details, perceived as negative, had already been disclosed and the stock was dropping fast.
After trending higher most of the day, Disney stock plunged 5% about 30 minutes before the close.
At the start of Disney’s conference call to discuss earnings results, senior vp investor relations Lowell Singer said: “We are aware that information regarding our fourth-quarter earnings became available ahead of its formal release, and we are investigating how this occurred.”
Shortly after the stock drop, Disney released its results, which showed revenue and profit that were slightly beneath what analysts were predicting.
The stock, though, recovered slightly, losing 3% on the day to $35.93, then shares rose an additional 2% in after-hours trading.
Disney’s revenue dropped 1% in the fiscal fourth quarter to $9.7 billion, and net income fell 7% to $835 million.
Disney said a programming write-off at an equity network and the timing of some revenue recognition at ESPN contributed to the falling numbers.
For the fiscal year, Disney showed a 5% revenue increase to $38 billion as net income soared 20% to $4 billion.
Studio Entertainment made the most dramatic gains for the year, with revenue rising 9% to $6.7 billion and operating income soaring almost 300% to $693 million.
Theatrically, Disney had Toy Story 3, Alice in Wonderland and Iron Man 2 this year compared with Up, The Proposal and Bolt last year.
Of Disney’s five segments, three showed increased revenue while two declined.
The biggest segment, Media Networks, reported a 7% decline in revenue to $4.4 billion while operating income fell 18% to $1.2 billion.
The second biggest segment, Parks and Resorts, reported revenue that fell 1% to $2.8 billion and operating income that dropped 8% to $316 million. 
Studio Entertainment is Disney’s third-largest segment, and its revenue grew 6% to $1.6 billion. Operating income was $104 million compared to a loss of $13 million a year ago.
At Consumer Products, revenue rose 13% to $730 million and operating income rose 22% to $184 million.
The smallest segment, interactive media, reported revenue that rose 20% to $188 million. The unit lost $104 million compared to a $114 million loss last year.
On the conference call to discuss the results, Disney CEO Bob Iger said he is “quite mindful of the losses” in that segment, which includes video games and various Internet assets.
He said that ESPN.com, ABC.com and Disney.com are great marketing tools, but they’re losing money and his goal is to see them each turn a profit. ESPN.com is the closest or the three to profitability, he said.
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