Disney Broadcast Operating Income Drops 38 percent
May 6, 2009
LOS ANGELES: Second fiscal quarter revenues for Disney’s ABC broadcasting division came in at $1.4 billion, down 2 percent from a year ago. Operating income fell 38 percent to $162 million during 2Q09.
The decrease was attributed to lower ad sales at the company’s 10 ABC television stations, and higher programming costs on the network. The decline was partially offset by increased sales of ABC Studios productions in international markets, led by “Ugly Betty,” “Desperate Housewives” and “Criminal Minds.” Disney said production expenses were higher for the quarter because the Writers’ Guild strike stopped work during much of 2Q08.
Disney’s (NYSE: DIS) cable networks turned in revenues of $2.2 billion, up 4 percent from a year ago. Operating income for the cable nets was $1.1 billion, up 5 percent from 2Q08.
“The growth at ESPN was driven by higher affiliate revenue primarily due to contractual rate increases partially offset by decreased advertising revenues and higher programming costs,” Disney’s earnings release stated. “The decrease in advertising revenues was due to a decrease in sold inventory, partially offset by higher rates. Operating income growth at ABC Family reflected higher advertising and affiliate revenue, both of which were driven by higher rates, along with higher sold advertising units, while growth at the domestic Disney Channel was driven by higher affiliate revenue due to higher rates.”
Consolidated revenues for Disney came in at just over $8 billion, down from $8.7 billion a year ago. Net income was $613 million compared to $1.13 billion last year. Income was affected by $305 million in impairment and restructuring charges. Earnings per share came in at 33 cents. Excluding charges, EPS was 43 cents.
Disney finished the quarter with cash and equivalents of $3.4 billion, and long-term liabilities of $3.6 billion. Shares rose to $26.12 in mid-afternoon on a wider market rally after closing yesterday at $23. -- Deborah D. McAdams