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Walt Disney Co. Reports 7% Drop In Earnings For Fourth Quarter
Published November 12, 2010
The Walt Disney Co., “burdened by a $60-million write-off for its cable networks and an accounting wrinkle involving ESPN, reported a 7% drop in earnings for its fiscal fourth quarter, driving its stock down after the news leaked out half an hour before the close of trading” Thursday, according to Dawn Chmielewski of the L.A. TIMES. Disney posted a profit of $835M, or $0.43 a share, for the three months ended Oct. 2. Revenue "fell slightly" to about $9.7B from nearly $9.9B. Despite the charges and write-offs, Disney reported “advertising gains for its cable and broadcast TV networks and improving trends at its theme parks and the film studio.” But the cable networks group "recorded nearly $60 million in programming write-offs at A&E/Lifetime." ESPN “hit performance benchmarks earlier this year.” The net recorded about $354M in revenue for Q3, "reducing revenue that normally would have been booked” in Q4. Disney execs said that “that cost the company about 9 cents a share.” The A&E and ESPN "problems sent operating income down 18% to $1.2 billion at the company's media networks group." Revenue for the group "dropped 7% from a year earlier" to $4.4B (L.A. TIMES, 11/12). ESPN during Q4 “recognized $170 million of previously deferred revenue compared to $524 million” in the year-ago period (CABLEFAX DAILY, 11/12). At presstime, shares of Disney were trading at $37.70, up 4.93% from Thursday's close of $35.93 (THE DAILY).