Disney Profits Drop 13%

After a series of quarterly earnings that defy analysts expectations, Disney for the first time is reporting a decline in profit for the past quarter, with a drop of 13% blamed on the weak economy.

But Disney on Thursday reported a 13 percent decline in quarterly earnings on weakness in nearly every part of its empire. Movie earnings in the company’s fiscal fourth quarter, ended Sept. 27, plunged 42 percent because movies like “Swing Vote” and “Miracle at St. Anna” were virtually ignored at the box office. Advertising declines hurt two Disney properties, ABC and ESPN, leading to a 4 percent drop in income at the media networks unit.

Income at the theme parks dropped 4 percent because of lower bookings at Disneyland and higher costs at Walt Disney World. Over all, Disney reported net income of $760 million, or 40 cents a share, for the quarter, compared with $877 million, or 44 cents a share, a year earlier. For 2008, net income dropped to $4.4 billion from $4.7 billion.

Again, for me, this is not unexpected, and I fully expect Disney stocks to dive today. But this also means that we will be buying even more Disney stocks. One needs to consider that if one looks at other parts of the entertainment sector, Disney hasn't suffered much at all in terms of its earnings. This means that this is a solid, well-managed company, and, as most people seem to forget, is still MAKING PROFIT! This is way more that can be said when compared to many other companies that are losing money.

For my part, I'm still going to WDW this December! :)

Edit: and now, with the added incentive to book a Disney vacation comes a terrific deal.

Zz.