Troubles at The Walt Disney Co.'s TV networks and falling theme park attendance offset gains at the movie studios, causing a 7 percent slide in profits and 9 percent dip in earnings per share (from 43 cents to 47 cents) for the fourth quarter.
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Profits at its networks — which include ESPN and ABC — slid more than 18 percent during the three-month period that ended Oct. 2. And operating income at Disney's Parks segment fell 8 percent during the quarter — 7 percent for the full year.
Disney blamed "a decrease at ESPN and lower cable equity income driven by the programming writeoffs at A&E/Lifetime" for a $413 million drop in operating income at its cable networks, which slid to profits of $1.1 billion. And Disney specifically pointed to the timing of revenues for the decrease at ESPN.
However, operating income at its broadcasting segment — specifically ABC — increased $145 million (to $147 million) on decreased programming and production costs, higher advertising and affiliate fees. For the full fiscal year, Disney's networks turned an 8 percent profit (or $5.13 billion).
Revenues at Disney's movie studio increased 9 percent (to $6.7 billion) and operating income more than tripled (from $175 million to $693 million) on the strength of a slate that included "Toy Story 3," "Alice in Wonderland" and "Iron Man 2."
For the quarter, revenues increased 6 percent (to $1.6 billion) and operating income swung to a profit ($104 million).
"The 2010 fiscal year was a financial and strategic success for the Walt Disney Co. with performance driven by great content like 'Toy Story 3' and the way we benefited from that content across our many businesses," Disney chief Bob Iger said in a statement accompanying the earnings results. "With the acquisition of Marvel, our brand and franchise portfolio is stronger than ever and we're confident our global growth strategy positions the company well to thrive in the coming years."
During a conference call with investors, Iger praised Pixar for the quality of "Toy Story 3" — and, well, himself, for restructuring the studio to eliminate unnecessary costs that he hopes will drive profits in the months to come.
In the parks sector, the company blamed the slide on a price hike instituted at its domestic resorts, lower hotel occupancy, lower attendance at Walt Disney Resort and a decrease at Disney Cruise Line. (The price hike, however, partially offset the drop in attendance, with fewer people spending more money at Disney resorts.)
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