Disney Earnings Up 18% for Q4, But ’09 Still Downbeat

Despite sunny fourth-quarter news, Iger says studio “had an extremely disappointing year.”

Last Updated: November 13, 2009 @ 5:06 AM

The Walt Disney Company beat analysts’ expectations in the fiscal fourth quarter with an 18 percent increase in profits — primarily driven by increased revenues at the ESPN and ABC Family networks — but it wasn’t enough to offset troubles that led to a 25 percent net income drop for 2009.

For the fiscal year, Disney’s earnings per share fell 20 percent. Revenues fell 4 percent to $36.15 billion.

The earnings report comes just hours after a shakeup in the executive suite at the Burbank, California-based company. Parks and resorts chairman James Rasulo and CFO Tom Staggs will swap jobs at the end of the year, CEO Bob Iger announced earlier Thursday.

Revenues from its media networks – including ABC and ESPN — rose 2 percent to $16.2 billion, helped in part by ESPN’s higher affiliate rates. That bump was offset by the downturn in advertising, Disney said.

Operating income for its broadcasting segment decreased $337 million to $505 million for the year due to lower advertising sales at the ABC Television.

“The studio had an extremely disappointing year,” Iger said during a conference call with investors.

Revenues for Disney’s studio segment decreased 16 percent to $6.1 billion, while operating income plummeted 84 percent to $175 million. The slide was driven by slumps in worldwide home entertainment — including a decline in the DVD market — worldwide theatrical distribution and worldwide television distribution.

(Disney said its slate of DVD releases like "WALL-E" and "The Chronicles of Narnia: Prince Caspian" could not match "Pirates of the Caribbean: At World’s End," "Ratatouille" and "National Treasure: Book of Secrets" from the prior year.)

Meanwhile, Iger said the company is getting closer to closing the Marvel deal, and is “absolutely delighted” about the company’s plans to open a theme park in Shanghai.

“China is an extremely important country to us,” he said.

Iger said that the company is close to naming a director for “Pirates of the Caribbean 4” — slated to begin shooting next spring — and that star Johnny Depp “is very much on board.” Depp was close to Dick Cook, the studio chairman who was ousted last month.

On the disappointing opening of “A Christmas Carol,” he added: “We believe we have a good film, but we’d be remiss if we said we were elated.

“Although last year was a difficult one due in part to the weak global economy, I’m pleased with the way our businesses have responded to the downturn,” Iger said, adding that Disney has maintained its focus on a “long-term strategy” and “efficiently managed costs.”

Shares had closed down 24 cents at $29.05 before the earnings release Thursday, but rose 66 cents, or 2.3 percent, to $29.71 in after-hours trading.