The Walt Disney Co. said Thursday its fiscal third-quarter profit fell 26 percent as slower DVD sales pushed its movie studio into the red while the weakening market for TV ads stabilized.
Hurt by the tough global economy, net income for the family entertainment company, which owns Disney theme parks, TV networks ABC and ESPN and the Pixar animation house, sank in the three months ending June 27 to $954 million, or 51 cents per share. That's down from $1.28 billion, or 66 cents per share, in the same period a year ago.
Revenue fell 7 percent to $8.6 billion, from $9.24 billion, a year ago.
After excluding a restructuring and impairment charge of a penny per share, adjusted income was 52 cents per share.
That barely beat analysts expectations of 51 cents per share of earnings, but the revenue figure was below estimates of $8.83 billion, according to Thomson Reuters.
"We do see signs of economic stabilization, but the pace and strength of recovery remain uncertain and we are managing accordingly," Chief Executive Robert Iger said on a conference call.
Revenue from ABC and ESPN fell 2 percent to $3.96 billion, driven by lower advertising revenue at ESPN. The company said its owned and operated local ABC affiliates saw an ad revenue decline of 26 percent, while the ABC network's ad revenue was down in the mid-single digits.
Revenue at ESPN was down by nearly 10 percent, although the company expects some of the lost revenue will be booked in the current quarter.
Parks and resorts revenue fell 9 percent to $2.75 billion as guests spent less, but Chief Financial Officer Tom Staggs said in a conference call with journalists that the company was "pleased with the attendance overall."
Movie studio revenue fell 12 percent to $1.26 billion as this year's home video slate didn't compare well to last year's releases, which included "National Treasure: Book of Secrets" and "Enchanted." The studio posted a $12 million operating loss, down from a $97 million operating profit last year.
It also expects to book higher profits in the future on the success of the Pixar movie "Up," as well as "G-Force," which debuted at No. 1 at the domestic box office last weekend.
Consumer products revenue fell 10 percent to $510 million.
Shares fell 94 cents, or 3.6 percent, to $25.28 in extended trading Thursday. Before the release of results, shares closed up 33 cents, or 1.3 percent, at $26.22.