ABC’s FY09 Results Reflect Lower Primetime Ratings

Fourth-quarter revenues nonetheless increase
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BURBANK, CALIF.: Higher programming costs, bad debt and lower ratings hit the broadcast unit of Disney, which includes the ABC Network, syndication, radio and 10 TV stations. Operating income was down 40 percent to $505 million for the fiscal year ending Oct. 3, 2009, compared to a year ago. Revenues for the broadcasting unit fell 3 percent to $5.65 billion.

Disney said results for the network alone were comparable to F4Q08 quarter because decreases were offset. Ad revenues fell on lower primetime ratings, and programming costs grew because of more hours of original scripted material.

Disney said the decreases were partially offset by syndication sales of “Grey’s Anatomy,” “Desperate Housewives” and “According to Jim.” The cost of creating pilots was also reduced due to quicker pick-up compared to last year when the writers’ strike stopped production for several weeks.

The fiscal fourth quarter for the broadcast unit was brighter than the full year. Broadcast revenues were $1.39 billion, up 14 percent from F4Q08. Operating income for the unit was $2 million compared to a loss of $71 million a year ago.
Disney’s consolidated revenues for FY09 were $36.1 billion, down 4 percent from the previous year. Net income was down 25 percent to $3.3 billion. Diluted earnings per share were $1.76 versus $2.28 last year.

Consolidated revenues for F4Q09 were nearly $9.87 billion, up 4 percent from the year before. Net income was up 18 percent to $895 million. Diluted EPS was 47 cents compared to 40 cents a year ago, exceeding estimates by analysts who low-balled the media unit that includes broadcasting.

Shares of Disney (NYSE: DIS) surged Friday on the news of its results, from around $29 to a high of $30.86 in today’s trading.

More on Disney and ABC:

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July 8, 2009: “Analysts Raise Target Sell Price on Disney”
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May 6, 2009: “Disney Broadcast Operating Income Drops 38 percent”
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.

April 30, 2009: “Disney Buys Into Hulu
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