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Magic eludes Disney in 4Q
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November 3, 1998: 6:22 p.m. ET
Profits skid 24 percent, hit by lackluster show in home video, film
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NEW YORK (CNNfn) - As anguished Walt Disney investors discovered Tuesday, it's a smaller profit after all.
Disney said its net income slid 24 percent in the fourth quarter, hurt by weakness in motion-picture distribution and international home video, as well as high start-up costs for the recent launch of its problem-plagued Disney Cruise Line.
The Burbank, Cal.-based entertainment conglomerate said profit for the quarter ended Sept. 30 fell to $296 million from a proforma profit of $390 million a year earlier, as earnings per diluted share skid to 14 cents from 19 cents.
The results included charges totaling $64 million, or 2 cents a diluted share, related to the strategic downsizing of the company's consumer-products business and consolidation of certain studio operations in its filmed-entertainment business.
Excluding the charges, Disney earned 16 cents a share in the quarter, beating analyst expectations by a penny.
Revenue for the quarter increased 13 percent to $6.147 billion from $5.429 billion in the year-ago period. Operating income declined 19 percent to $751 million from $927 million.
Disney said the increased revenue was offset by operating costs at its new Animal Kingdom theme park and start-up costs at the cruise line.
Creative content revenue rose 8 percent to $2.9 billion, while theme park and resort sales climbed 18 percent to $1.524 billion, driven primarily by increased guest spending, higher-occupied room nights and record attendance at the Walt Disney World Resort.
Increased revenue in the film division was offset by higher costs in live-action productions. Broadcasting operating income decreased 18 percent to $197 million in the quarter, despite an identical increase in revenue, to $1.8 billion.
Shares of Disney (DIS) ended up ¾ at 29-9/16 Tuesday on the New York Stock Exchange.
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