"The outlook [for the parks] is holding steady," said Anthony J. DiClemente of Lehman Bros. Equity Research. "Investors are focused on whether the next leg of information is going to be a re-acceleration or a deceleration in the year-over-year growth."
Disney's cable networks delivered double-digit gains in operating income, up 14% to $1.2 billion, thanks primarily to sports juggernaut ESPN. Cable network revenue jumped 12% to $2.6 billion.
For The Record
Los Angeles Times Friday, August 01, 2008 Home Edition Main News Part A Page 2 National Desk 2 inches; 57 words Type of Material: Correction
Disney earnings: An article in the Business section on Thursday about Walt Disney Co.'s third-quarter earnings said the well-received Disney/Pixar Animation film "Wall-E" did not compensate for Disney's underperforming movie "The Chronicles of Narnia: Prince Caspian." "Wall-E" opened June 27, a day before the end of the quarter. Its performance will be reflected in Disney's fourth-quarter results.
The Disney Channel, whose "Camp Rock" movie generated what Iger described as "near record" cable ratings and online traffic, also gained subscribers.
But the broadcasting group's operating income fell 11% for the quarter to $260 million, dragged down by lower ad sales at the local television stations. Broadcasting revenue was flat at $1.5 billion compared with the same quarter a year earlier.
Staggs told investors that the pace of ad sales for the local-station group, and to a lesser extent ESPN and the ABC television network, had slowed in recent weeks because of softness in the domestic auto, financial services and consumer electronics markets.
The big bleak spot in Disney's third-quarter results occurred at the movie studio.
Although the Disney/Pixar Animation film "Wall-E" performed well and received wide critical acclaim, it did not compensate for the underperformance of "The Chronicles of Narnia: Prince Caspian." Studio Entertainment division revenue was $1.4 billion, a 19% drop from a year earlier, when Disney released "Pirates of the Caribbean: At World's End." Operating income plunged 49% to $97 million.
The consumer-products unit reported a 20% jump in quarterly revenue to $642 million, driven primarily by the acquisition of Disney Stores in North America and licensing revenue collected on "Hannah Montana" and "High School Musical" merchandise. However, its operating income fell 4% to $113 million from a year earlier, because of sluggish sales of video games and ongoing investment in development.
Shares of Disney fell 77 cents to $30.90 in late trading Wednesday after the earnings announcement. The stock had risen 75 cents to close at $31.67.
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dawn.chmielewski @latimes.com
