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Disney reports Q2 earnings dip

Even the powerful House of Mouse is feeling the economic downturn, posting drops in second quarter results across most lines of Disney business.
May 6, 2009

Even the powerful House of Mouse is feeling the economic downturn, posting drops in second quarter results across most lines of Disney business.

The one bright spot was Disney’s consumer products segment, where Q2 revenues saw a 9% uptick to US$496 million, driven largely by the acquisition of the Disney Stores North America in fiscal Q3 2008.

Revenues in the Parks and Resorts were down 12% to US$2.4 billion, with lower operating income due drops in attendance at Walt Disney World Resort, Disney Vacation Club, Disneyland Resort and Disneyland Resort Paris. There was also a lower operating income at the Walt Disney World Resort and Disneyland Resort, primarily as a result of decreased guest spending from lower average daily hotel room rates, lower average ticket prices and decreased merchandise spending. At Disneyland Resort, decreased guest spending was primarily due to lower average ticket prices and decreased merchandise spending.

On the studio entertainment side, Q2 revenues took a 21% dip to US$1.4 billion, with segment operating income dropping 97% to US$13 million from declines in domestic home entertainment (lower sale units of current quarter titles, including High School Musical 3: Senior Year, Beverly Hills Chihuahua and Bolt, contributed to the drop) and worldwide theatrical distribution sales.

As for worldwide theatrical distribution, there was a lower performing slate of titles in domestic and international markets, and a higher distribution expense for future quarter releases in domestic markets.

Interactive media revenues, meanwhile, were also down 17% to US$129 million, with revenue declines at Disney Interactive Studios being driven by lower sales of self-published video games.

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