Walt Disney Co. said Thursday that earnings skidded 13% for its fiscal fourth quarter, and executives gave what they called a "sobering outlook" for its current year because of slowing television advertising sales and theme park resort bookings.
Net income dropped to $760 million, or 40 cents a share, for the quarter ended Sept. 27, compared with $877 million, or 44 cents, for the same period last year. Revenue increased 6% to $9.4 billion from $8.9 billion.
Excluding one-time charges, the Burbank entertainment giant's earnings were 43 cents a share, well short of analysts' estimates of 49 cents, according to a survey by Thomson Reuters.
"The quarter was uglier than anyone anticipated," said Janna Sampson, co-chief investment officer at Oakbrook Investments. "Going forward, it becomes a question of how long and how deep this economic recession will last. And that's very, very difficult to predict."
Disney Chief Executive Bob Iger, though, was more upbeat.
"Despite a steadily weakening economy, we delivered very solid results for the year," he said.
The quarterly results helped drag down annual earnings. For the year, net income was $4.4 billion, or $2.28 a share, a 5.5% decrease from $4.7 billion, or $2.25 a share, in the previous fiscal year. Meanwhile, Disney hauled in record revenue of $37.8 billion, a 7% increase from $35.5 billion last year.
That wasn't enough to cheer investors, however. Disney shares fell $1.42, or 5.9%, to $22.81. The company released its results after the markets closed, and its stock tumbled as much as $1 a share in after-hours trading.
Tougher times could lie ahead.
"In recent weeks, as the economy deteriorated, our pace of business has been impacted," Iger said. "We have seen significant softening in the local ad market as well as a slowing of the pace of national advertising."
Nearly 20% of the company's revenue comes from advertising.
For the quarter, Disney's media networks division -- overseeing both cable and broadcasting -- generated $4.2 billion in revenue, 4% higher than last year's final quarter. Operating income was flat at $1.1 billion.
Quarterly operating income for the cable networks increased $116 million, to $1.2 billion, in large part because of higher ESPN cable subscriber fees. But those gains were partially offset by lower advertising revenue. ESPN relies on auto advertising, which has been dramatically cut back because of sluggish auto sales. Ads for electronics and financial firms also are down, Iger said.
