Disney profits dive
August 3, 2009
The tough consumer environment took its toll on Walt Disney's Q3 earnings, with profits down 25 per cent on falling television advertising income and declining home entertainment sales.
Bob Iger, chief executive, acknowledged the difficult economic conditions but said the company, which owns the ABC television network and ESPN cable channel, had detected signs of "economic stabilisation". But he added that "the pace and strength of the recovery remain uncertainâ€¦ we are managing accordingly."
Disney's film studio business also suffered, with home entertainment sales falling against the same period the previous year. Studio operating income fell $109 million to a loss of $12 million.
Iger said Disney was continuing to examine cost-cutting measures for the studio, adding that the business model for the film industry was shifting. "The old notion that you can make money from everything is not the case anymore," he said.
He took a bullish stance on Disney's international expansion, pointing to recent investment in the UK by ESPN. The channel has acquired the rights to some Premier League football matches over the next three years, putting it into direct competition with BSkyB.