ABC’s FY09 Results Reflect Lower Primetime Ratings

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:

August 3, 2009: “Netflix Picks Up More Disney-ABC Fare”
Netflix and Disney-ABC Television Group have reached an agreement to make several TV series available to the online movie rental service.

July 8, 2009: “Analysts Raise Target Sell Price on Disney”
Pali Capital analyst Rich Greenfield raised his target sell price on Disney, but retained his “sell” rating nonetheless. The new 12-month price target is $17, revised from $12.50.

June 18, 2009: ABC News Nets 800K Viewers in Recount”
ABC scored an additional 800,000 viewers for its evening newscast last week after a recount by Nielsen Media Research. The recount boosted the average nightly audience for the newscast from 6.2 million to nearly 7 million.

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
Disney has agreed to take a 30 percent stake in online video purveyor Hulu.