In the face of a tough economy, the Walt Disney Company still managed to increase revenues 6% to $9.45 billion in its fiscal Q4 (July-September), although operating income declined 4% to $1.74 billion. Broadcasting revenues grew 4% to $1.29 billion, but that was despite lower ad sales at the O&O television group.
For the quarter, the operating loss at Broadcasting increased $117 million to a loss of $150 million, driven by a decrease at the ABC Television Network and lower advertising revenues at the owned television stations, partially offset by an improvement at the Internet Group, the company said. “The decrease at the ABC Television Network reflected lower advertising revenues, higher pilot expenses and increased news production costs related to presidential election coverage. Lower advertising revenues were due to lower ratings and sold inventory partially offset by higher rates. Increased pilot costs reflected a delay of pick-up decisions to the fourth quarter of the current year versus the third quarter when most of the pick-up decisions were made in the prior year. The delay was primarily due to the impact of the Writers Guild of America work stoppage. The improvement at the Internet Group reflected the absence of costs related to the Disney-branded mobile phone service partially offset by higher costs related to international mobile and on-line operations and our Disney.com website,” according to the quarterly announcement.
Meanwhile, Cable Networks revenues gained 5% to $2.93 billion and operating income grew 11% to $1.21 billion. That was attributed primarily to growth at ESPN, Disney Channel, ABC Family Channel and higher income from the company’s cable equity investments. Disney’s remaining radio assets, Radio Disney and ESPN Radio, are included in the Cable Networks segment.
Parks and Resorts posted a 7% revenue gain to $2.97 billion in the quarter, but Disney CEO Bob Iger cautioned that there could be problems ahead. He told analysts that theme-park bookings have “fallen of considerably” in the past month. “Consumer confidence is the lowest we’ve seen in over three decades,” he said.