Walt Disney profits tumble

Profits at Walt Disney have dived and the entertainment company’s media and film divisions have been hardest hit.

Profits dropped 42% in the first quarter despite a strong performance at the ABC Television subsidiary and improved attendance at Disney theme parks.

The company, famous for its cartoon characters including Mickey Mouse, reported net income in the first quarter ended December 31 of $256m (€236m) compared with net income of $438m (€404m) in the same quarter last year.

An after-tax charge of $83m (€76m) for investments in aircraft that Disney leased to United Airlines was included in the figures.

The previous year’s first quarter included a one-time gain of $216m (€199m) from the sale of shares in Knight Ridder.

Disney has said it expects earnings per share growth of between 25% and 35% in 2003 as it profits from investments made in the past few years.

Chairman and chief executive officer Michael Eisner said: “Our most recent quarter’s results, especially the strength of the Disney parks in the face of continued economic softness, are further evidence of the soundness of our strategic plan.”

Attendance and spending at Disney’s domestic theme parks rose during the past year, contributing to a 20% jump in operating income to $225m (€208m).

Disney said international visits grew 17% at Walt Disney World in Orlando, Florida, and even higher at the Disneyland Resort in Anaheim, California.

Operating income at its media networks division, which includes ABC and its cable networks, dropped 7% in the quarter to $225m (€208m), although revenue increased 9%.

Disney said it is beginning to see the results of higher ratings at ABC. Revenue from advertising rose during the quarter while costs decreased.

But its cable TV results were hit by higher sports rights costs.

Operating income also dipped at Disney’s film studio due to reduced revenue from theatrical releases, partially offset by an increase in income from the sale of DVDs.