Disney Q1 profit slips 32%
California, US-based Disney reported a 32 per cent drop in net income for the first quarter of the year to $845m, as the company’s broad range of businesses – one of its bedrock strengths – failed to shield it from the global economic downturn.
Within Disney, movies were the worst hit, as DVD sales fell. Revenues from its film studio business, which owns the Pirates of the Caribbean, Ratatouille and The Chronicles of Narnia titles, sank 26 per cent to $1.9bn against the same quarter in 2007.
Sales from its resorts such as Disney World dropped four per cent to $2.65bn during the first quarter, while total group revenue fell eight per cent to $9.6bn.
"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," commented Disney president and CEO Robert Iger.
"We are forcefully confronting current circumstance while investing in the great creativity, brands and assets that are Disney’s strengths and keys to its long-term success."
Those challenges include some which are likely to be only temporary, such as the downturn in consumer spending, but also more systemic problems, such as the decline in traditional advertising which threatens the bedrock of the group’s television businesses.
In order to combat some of the downturn, Disney has begun reducing headcount, with its theme park business offering redundancy packages to around 600 executives, while its Disney-ABC television business has announced plans to cut 200 staff and freeze a further 200 unfilled positions.