Walt Disney shares fall on disappointing Q2 results
Walt Disney (NYSE:DIS) shares fell as much as 6% on Wednesday after the company reported late yesterday a drop in second quarter earnings due to the box office failure Mars Needs Moms, and the recent crisis in Japan.
For the three months ending April 2, the California-based company reported net income of US$942 million, or 49 cents per share, compared to $953 million, or 48 cents a share, in the year-ago period.
The results missed analyst expectations of 57 cents per share by a wide margin.
Revenue, however, grew 6% to $9.08 billion from US$8.6 billion in the comparable year-period, but still came in below analyst estimates of $9.12 billion.
Disney said the poor performance of 'Mars needs Moms' caused it to take higher film cost write-downs for this quarter, while results from the year-ago period also included significant home-video proceeds from the first two Toy Story films.
As a result, studio entertainment revenues for the quarter decreased 13% to $1.3 billion and segment operating income dropped 65% to $77 million.
On a more positive note, revenue from the company's core media networks unit, which includes sales from cable networks and broadcast, grew 12% to US$4.3 billion, due to advertising gains at ESPN and to growth in subscribers and fees at its Disney channels.
The theme parks and resorts division also reported gains in revenue, but operating income in the unit dipped 3% due to the earthquakes in Japan. The March disaster forced closures at its Tokyo resorts. The fallout is expected to cut into earnings for the rest of the year, Disney said.
Shares of the company closed down by 5.4% on Wednesday to $41.52.
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