Disney Reports Profit to Be Soft Due to Spending

Walt Disney Co. on Tuesday repeated that its earnings in the next couple of quarters likely will experience “some softness” because of increased spending to build its Internet unit, Go.com Inc.

Earlier this month, Disney said that revamping Go.com would result in the softer results for the second quarter ending March 30.

The company reiterated this view at its annual shareholder meeting Tuesday in Chicago. Disney’s stock fell $2.13 a share to close at $33.38 on the New York Stock Exchange.

Disney has been working to increase its overall profit by selling businesses and cutting costs. Last month, Disney reported that its fiscal first-quarter profit rose, thanks in part to gains at ABC, which has moved from being the No. 3-rated television network to No. 1 because of the hit “Who Wants to Be a Millionaire.”

At the same time, the company is trying to revamp its Go Network, a collection of Web sites that make up Go.com, from a general-interest Web portal to one focused on entertainment and leisure.

“Although these steps may impact short-term performance, they are necessary to ensure the long-term success of Go,” Chief Financial Officer Thomas Staggs said.

Separately, Disney shareholders rejected two shareholder proposals: one to consider cutting executive pay and another to create an election contest for each board seat.