Walt Disney Co. said Tuesday that lower revenue and profits at its theme parks and movie studio contributed to a 46 percent drop in second quarter net income. Earnings narrowly beat Wall Street estimates, though revenue was slightly off.
After the markets closed, the Burbank entertainment giant reported net income of $613 million (33 cents per share) compared with $1.13 billion (58 cents) a year ago. Revenue dropped 7 percent to $8.09 billion.
Excluding restructuring charges and other one-time items, Disney's net income was 43 cents per share. Analysts surveyed by Thomson Reuters on average expected per share profit of 40 cents on revenue of $8.15 billion.
Disney took $305 million in charges, including $102 million in restructuring costs as the company cut 1,900 positions at its parks division. Operating profits in that unit fell 50 percent to $171 million as visitors declined and spent less, prompting the resorts to offer discounts that reduced margins.
Studio operating profits fell 97 percent to $13 million as theatrical releases of films such as "Race to Witch Mountain" didn't perform as well as last year when "National Treasure 2: Book of Secrets," and "Hannah Montana/Miley Cyrus: Best of Both Worlds" were bigger hits.
On the upside, profits at cable networks ESPN, ABC Family and the Disney Channel grew 5 percent to $1.14 billion as higher fees from cable and satellite systems offset lower advertising revenue. But at the broadcast division, which includes the ABC TV network and company-owned affiliate stations, profits fell 38 percent to $162 million.
"We had a difficult second quarter due to the weak economy and other factors," said Chief Executive Robert Iger in a statement. "At the same time, we remain focused on our core business strategy and believe our creativity, brands and businesses will serve us well as the economy recovers."
Disney shares closed up 29 cents, or 1 percent, to $23.15, and rose another 3 percent in after-hours trading.
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