Shares of Disney (NYSE: DIS) dipped at this morning’s bell after posting fiscal 1Q09 results that missed Wall Street’s expectations. For the quarter ending Dec. 27, 2008, Disney reported revenues of nearly $9.6 billion, down 8 percent from nearly $10.5 billion in 1Q08. Net income was $845 million, down 32 percent from $1.3 billion a year ago. Disney posted after hours yesterday, when shares closed at around $20.70. They opened this morning at around $19.50.
Revenue at Disney’s ABC network was down 14 percent for the quarter, from nearly $1.7 billion last year to more than $1.45 billion this year. Operating income was down 60 percent, from $343 million last year to $138 million this year. The decline was attributed to lower ad revenue, which it said had more to do with ratings than ad spending. A bad debt from Tribune, one of the network’s syndication customers, also hit broadcast results.
Cable net revenue was up 2 percent, from $2.4 billion to nearly $2.5 billion. Operating income slid 12 percent, from $586 million to $517 million. Disney, based in Burbank, Calf., listed several factors affecting the cable results in its earnings release.
Lower DVD sales hit the domestic Disney Channels, compared to the previous year when “High School Musical 2” was everywhere you are. ESPN had less ad revenue and more programming expenses, “partially offset by higher affiliate revenue,” Disney said.
“The decrease in advertising revenues was due to a decrease in sold inventory, partially offset by higher rates. Higher programming costs reflected increased costs for NFL programming,” Disney said. “The increase in affiliate revenue was due to higher contractual rates and, to a lesser extent, subscriber growth.”
Disney earlier announced that it would cut 400 jobs from the ABC TV division, axing 200 people from its payroll, and leaving another 200 positions unfilled. The cuts will come across the ABC Network, ABC News, Disney Channel, ABC Family and SoapNet. Disney-owned ESPN also announced the elimination of 200 jobs and a salary freeze for senior executives. About 600 executives in the theme-park division were offered buyouts in January.
Disney employs around 7,000 people total. The company culled more than $4.4 billion in net income from nearly $38 billion in revenues for fiscal 2008. Income was down 5 percent from 2007. CEO Robert Iger was nonetheless rewarded $30.6 million for the year, up 11 percent from ’07, The Los Angeles Times reported.