Disney Misses Profit Expectations, Japan Earthquake Offsets Park Attendance – Forbes (blog)
Disney’s Tokyo park was a big factor in the profit miss
A decline in worldwide park profits and one-time costs for its cruise fleet caused Disney’s profits to miss in the second quarter, sending shares down late Tuesday after the bell. The company reported revenue of $9.1 billion, up 6% from the year before, but fell short of profit expectations.
Disney, which does not issue guidance for the year, said the impacts of a late Easter and of the earthquake and tsunami in Japan were unforeseen factors in the company’s second-quarter earnings.
Net income was $942 million, or 49 cents per share, up a penny on a per share basis from the year before, but under the analyst consensus for 57 cents per share.
Operating income from Disney’s parks and resorts decreased 3% during the quarter from a year ago, to $145 million. Impacts from the disaster in Japan led to a decrease at the Tokyo Disney Resort, and a later Easter holiday pushed the results from that weekend out of the second quarter results, reflecting slower results at Disney’s domestic and international parks. Guests of Disney’s parks and resorts in the U.S. paid more on average for tickets and daily hotel rooms, leading to an increase in domestic profits.
Increased operating and promotion costs for the launch of a new cruise ship, as well as higher fuel costs, offset operating income for Disney Cruise Line, the company said.
Operating income in Disney’s media networks segment increased 17% during the quarter, due to growth in its cable networks ESPN, ABC Family and the Disney channels. The company’s studio entertainment business saw profit decrease heavily, by 65%, due to higher film cost write-downs and weak worldwide theatrical distribution.
Shares were down more than 3% in after-hours trading Tuesday.