In announcing its first full quarter results since acquiring
Capital Cities/ABC, Walt Disney Co. said pro forma net income
rose 25% to $406M, "buoyed by record theme-park attendance,
increased advertising on ESPN and healthy sales of home videos
and merchandise." The company's live-action film division posted
"lower than expected results, and advertising at ABC fell as a
result of a continuing slide in network ratings." Analysts said
earning were "in line with estimates." Earnings per share
increased 29% to $.59 from $.47 last year. Revenue rose 15% to
$5.09B from $4.4B, and income jumped to $956M from $830M.
Advertising and affiliate revenue were up at ESPN which "which
more than offset declines in advertising revenues" at the TV
network due to lower ratings (Lisa Bannon, WALL STREET JOURNAL,
7/26). Disney's results over the past year were examined on
CNBC's "Business Insiders" which focused on whether the "mega-
media marriage" between the two is in trouble. Author Ron
Grover: "ABC is a heck of a lot more of a problem than they
realized." Schroder Wertheim analyst David Londoner, noted,
"ESPN, which is a very important part of the whole CapCities
structure, is doing extremely well, the network is doing poorly,
the stations are doing all right and there are still some cost
savings to come ... and the whole concept of integration is still
in front of them" (CNBC, 7/25).
