Disney profits hit by tsunami
May 11, 2011
The Japan earthquakes forced the temporary closure of Disney’s Tokyo theme park and its retail stores in the country while the “very disappointing” release of ‘Mars Needs Moms’ provided a $90 million blow to the group’s Q2 operating profit.
Disney missed analyst estimates, with operating income $170 million below the comparable period last time. Net income for the quarter was $942 million compared with $953 million last time, while revenues rose from $8.6 billion to $9.1 billion.
Bob Iger, chief executive, pointed to a bright spot for the company as the advertising market continued to recover. Higher advertising sales and revenue from distributors at Disney’s media networks meant operating income at the cable group, which includes its ESPN sports channel, rose $174 million to $1.4 billion.
Disney’s interactive unit continued to struggle in the quarter: The division has failed to break even in spite of significant investment.
Losses widened from $55 million to $115 million, reflecting a $34 million charge related to the acquisition of Playdom, the social games developer bought by Disney last year.