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Disney has grumpy 3Q
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July 21, 1998: 6:54 p.m. ET
Film, video income drops 57 pct, but results solid from theme parks, TV
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NEW YORK (CNNfn) - It's been a disenchanting season for the Magic Kingdom as entertainment giant Walt Disney Co. reported Tuesday that a sharp decrease in film and video revenue had flattened its third-quarter earnings.
In the three months ending June 30, Disney net income fell 2 percent to $415 million, or 20 cents per share, missing the First Call consensus forecast of 21 cents per share.
On a pro forma basis -- accounting for the reorganization of its ABC television assets -- the company earned $425 million, 21 cents per share, in the comparable period of 1997.
Overall revenue for the quarter edged higher to $5.24 billion from $4.98 billion a year ago.
In the year to date, Disney has earned $1.55 billion, or 75 cents per share, on revenue of $16.82 billion, up 12 percent from the year-ago pro-forma figures of $1.61 billion, or 67 cents per share, on revenue of $16.18 billion.
"Although our third-quarter earnings were not as favorable as those of the prior year, I am pleased with the outstanding box office performance to date of 'Armageddon,'" said Disney Chairman and CEO Michael Eisner.
Creative Content revenues plunge
Operating income of Disney's film- and video-producing Creative Content unit in the quarter plunged 57 percent to $111 million from $257 million in the year-ago period, although gross revenue firmed 1 percent to $2.01 billion from $2.00 billion in the year before.
The company blamed the shortfall on "declines" in home video rental and theatrical box office revenues as well as "the impact of general economic weakness in many Asian markets" and the lack of runaway successes to match 1997's "101 Dalmatians," "The English Patient" or "Scream."
The picture was happier for Disney's broadcasting unit, where revenue grew to $1.72 billion for the quarter from $1.60 billion.
"Broadcasting results ... were driven by improvements at the television network and increased revenues at ESPN and the owned television stations," the company said, "partially offset by higher losses at start-up cable ventures."
Leading "improvements" cited by the company included higher advertising sales and lower prime-time programming costs.
Revenue from the company's theme parks and resorts unit reached a record high in the quarter, up 10 percent to $1.50 billion from $1.36 billion.
"Theme Parks and Resorts results for the quarter grew due to increased guest spending, higher occupied room nights and record attendance, driven by the opening of Disney's Animal Kingdom ... and the opening of New Tomorrowland," the company said.
In after-hours trading, Disney shares (DIS) were down 3/4 at 37. 
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