Disney’s ’90 Profit a Record; 4th Period Short of Expectations

Walt Disney Co. on Wednesday reported record earnings of $824 million for the fiscal year ended Sept. 30. But fourth-quarter results, reflecting a slackening in the tourist industry, fell short of what many analysts had predicted.

“The final quarter was negatively impacted by the weakened domestic economic climate,” Disney said in a statement.

Although the company described theme park attendance as “strong” for the year, it acknowledged that park operations were hurt by “weakening tourism” in the final quarter.

Revenue and earnings growth at Disney’s theme parks and resorts division lagged both the filmed entertainment and consumer products groups.

The company attributed the strong performance of its filmed entertainment division, where operating income increased 22% for the quarter, to home video sales of “Peter Pan” and rerun profit from “The Golden Girls” TV series.

Jeffrey Logsdon, an entertainment industry analyst at Seidler Amdec Securities in Los Angeles, described Disney’s fourth-quarter earnings as “in line with what the company had been expressing in recent months.”

Zacks Investment Research, which surveys earnings forecasts, had reported that the consensus of Wall Street analysts was for Disney to earn $1.76 a share in the fiscal fourth quarter. Actual results came to $1.72 a share.

For the fourth quarter, company revenue rose 27% to $1.71 billion, compared to the same period a year ago. Net income increased 9% to $232 million, while earnings per share were up 11.6% from last year, reflecting a smaller number of shares outstanding. For the year, revenue rose 27% to $5.8 billion, also a record.

Revenue for the theme parks and resorts division rose 7% for the quarter to $831 million, while operating income increased only 1% to $242 million. For the year, revenue was up 16% to $3.01 billion and operating income rose 13% to $889 million.

At its filmed entertainment division, which includes motion pictures, television and home video, revenue for the quarter was up 56% to $722 million, and operating income increased 22% to $104 million. For the year, revenue rose 42% to $2.25 billion, and operating income was also up 22% to $313 million.

Revenue at Disney’s consumer product group increased 48% for the quarter to $158 million, while income rose 8% to $50 million. For the year, revenue was up 39% to $573 million, and income rose 19% to $223 million.

Analysts said it will be difficult for Disney to continue its earnings momentum if the economy becomes mired in a recession. Operations such as theme parks and consumer products are sensitive to families’ budgets, they noted.

“I say the outlook is cautious,” said Jessica J. Reiff, an analyst with First Boston Corp. in New York. “Advance bookings at the theme parks were soft for December, and this is the first indication of the effects of a recession.”

Disney’s stock closed at $91.125 a share, up 12.5 cents. The company’s earnings were released after the market closed Thursday.