Mickey’s Sinking
Walt Disney Co. fell as much as 6.1 percent in New York trading after the world’s biggest theme-park operator said fewer visitors are booking resort vacations in the slowing U.S. economy. Disney reported parks and resorts profit of $412 million, down from $430 million a year earlier.
Reservations have “fallen off considerably” in the past month, Chief Executive Officer Robert Iger said on a conference call yesterday, after reporting a 13 percent decline in fiscal fourth-quarter net income. Disney is offering discounts and merchandise credits to spur attendance at the parks, where profit dropped 4.2 percent.
Earnings also declined at Disney’s television and film businesses. As U.S. consumers pull back spending, advertising cutbacks have led media-industry competitors News Corp., CBS Corp. and Viacom Inc. to lower their forecasts.
“There’s little place to hide right now from the recessionary downturn,” Janna Sampson, co-chief investment officer at Oakbrook Investments LLC in Lisle, Illinois, said in an interview. Disney’s “quarter was uglier than anyone anticipated.”
Disney fell $1.12, or 4.9 percent, to $21.69 at 9:32 a.m. in New York Stock Exchange composite trading after earlier declining to $21.41.
Net income dropped to $760 million, or 40 cents a share, from $877 million, or 44 cents, a year earlier, the Burbank, California-based company reported. Sales increased 5.8 percent to $9.45 billion, exceeding the $9.33 billion average estimate.
Source: Bloomberg
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