Disney plows through economic slowdown


The Media Networks segment of Disney, including ABC Television, ESPN, Disney Channel, Radio Disney and such, was the worst performer for fiscal Q2 (January-March), and even there revenues were up 5%. The O&O TV stations are feeling the impact of the ad slowdown in their local markets, but CEO Bob Iger is upbeat about the ABC Network’s position for the upcoming upfront.

For all of Disney, Q2 revenues were up 10% to $8.71 billion. Segment operating income shot up 21% to $2.14 billion and earnings per share were 58 cents, up from 43 cents a year ago. “This performance demonstrates how ‘The Disney Difference’ gives us a critical and sustainable market advantage,” crowed Iger.

The movie business was the quarter’s star performer, with revenues up 18% to $1.82 billion and operating income up 61% to $377 million.

Iger insisted that the Parks and Resorts segment has not been impacted by high gasoline prices. Rather, Disney is marketing its parks as a value priced vacation for families. Revenues for the segment were up 11% to $2.73 billion and operating income increased 33% to $339 million.

Media Networks is still the biggest part of Disney. That 5% gain in revenues took the unit to $3.61 billion for the quarter, with operating income up 14% to $1.32 billion. Big gains from international program sales, including “Grey’s Anatomy” and “Lost,” were partially offset by the impact of the writers strike limiting original scripted programming on ABC for the quarter.

With the strike in the past, Iger says scatter pricing is up over 50% from pricing in the last upfront. That makes Iger quite confident going into the upfront, given ABC’s strong stable of shows.

For the current quarter the ABC O&O stations are pacing down in the mid single digits.