Q4 decline for Disney, exec promos

Even the House of Mouse couldn't escape a tough year, as The Walt Disney Company posted its Q4 results. At the same time, chief Bob Iger has done some shuffling in the exec suite.
November 13, 2009

Even the House of Mouse couldn’t escape a tough year, as The Walt Disney Company posted its Q4 results. At the same time, chief Bob Iger has done some shuffling in the exec suite.

Retail was a challenge for the company across its licensing and publishing biz and lower operating income for the year and quarter reflected the effect the challenging environment along with last year’s strength of its Hannah Montana and High School Musical properties. As such, consumer products revenues for the year remained flat at US$2.4 billion, with segment operating income dipping 22% to US$609 million. For the quarter, the CP division saw revenues decline by 12% to US$646 million as well as a 28% dip in segment income to US$151 million.

On the studio entertainment side, revenues for the year decreased 16% to US$6.1 billion and segment operating income decreased 84% to US$175 million. The quarter saw revenues up 3% to US$1.5 billion and segment operating income decreasing to US$111 million to mark a loss of US$13 million. Decreases in worldwide home entertainment, worldwide theatrical and TV distribution sales affected the income, along with declines in unit sales and net effective pricing, which reflects the overall decline in the DVD market.Disney also saw a weaker performing slate of theatrical titles.

Interactive media revenues for the year saw only a slight 1% bump to US$712 million, while revenues for the quarter enjoyed an 8% increase to US$157 million. Lower operating results for the year came from a decrease in revenue at Disney Interactive Studios, partially offset by an increase at Disney Online, which were driven by decreased net effective pricing and unit sales of self-published video games, decreased licensing revenue and higher unit cost of sales, including the cost of bundled accessories and music royalties for current year titles. Notable self-published titles in the current year included High School Musical 3 and Sing It.

Operating income at cable networks increased by US$121 million to US$4.3 billion for the year as a result of growth at ESPN as well as ABC Family, but was partially offset by the transition of Jetix to Disney-branded channels. As for the quarter, operating income increased 19% to US$1.5 billion primarily from an increase at ESPN, as well as worldwide Disney Channels to a lesser extent.

The parks and resorts revenues saw a 7% decline to US$10.7 billion, with segment operating income taking a 25% dip to US$1.4 billion. Revenues also decreased 4% for the quarter to US$2.8 billion, both reflecting dips with Disney’s domestic operations and at Disneyland Parks from decreased guest spending at the domestic parks and resorts from lower average ticket prices, lower average daily hotel room rates and decreased merch spending.

On the exec front, president and CEO Bob Iger has engaged in some reshuffling, swapping roles for two Disney vets. Senior EVP and CFO Tom Staggs is stepping into a new position as chairman of Walt Disney Parks and Resorts. Staggs will put his 20 years of experience at the House of Mouse to good use, managing the company’s vacation businesses, including its cruise line and resort locations in North America, Europe and Asia.

He’ll be switching with James A. Jay Rasulo, who will take over Staggs’ role as senior EVP and CFO. He’ll now oversee the company’s worldwide finance organization, corporate strategy and development, brand management, corporate alliances, investor relations, among others. The 23-year Disney vet is credited with leading the recent negotiations with the Chinese government for a theme park in Shanghai, and was also the principal architect of the growth of the Disney Cruise Line.

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