BURBANK, Calif. – The Walt Disney Co. Thursday reported a 78 percent drop in fiscal fourth-quarter net profits amid continuing weak television advertising and slumping park attendance following the Sept. 11 attacks.
Disney reported a net profit of $53 million or 3 cents per common share for the quarter ended Sept. 30, down from $240 million or 11 cents per share in the year-earlier period. Revenues fell to $5.8 billion from $6.1 billion.
Excluding charges, pro forma profits for the fourth quarter were 6 cents per share, down from 15 cents per share a year earlier and slightly below the average Wall Street forecast.
Financial analysts on average expected Disney to earn 7 cents a share, based on estimates ranging from 10 cents to 3 cents a share, according to research firm Thomson Financial/First Call.
Burbank, California-based Disney, with its Disney movie studio, ABC and ESPN television networks and theme parks around the world, also projected that operating income for the current quarter would be less than half of year-earlier levels because of a contraction in its broadcasting operations and resorts.
Disney projected that the following three quarters would also see operating income down by as much as 10 to 15 percent below year-earlier levels as business conditions start to improve.
Disney shares ended trading up 35 cents at $18.84 on the New York Stock Exchange. The earnings report was issued after the market closed.
Chairman and Chief Executive Michael Eisner said in a statement, that the tough operating conditions had not eroded the "enduring value of Disney's broad array of assets," but pledged to keep watching costs carefully.
"Throughout the current downturn we will continue to manage our company in a way that carefully balances the need for near-term cost-reduction with the equally compelling need to invest for future growth," Eisner said in a statement.
The news comes as Disney ends a year plagued by weak advertising sales at the ABC Broadcast network since last fall when political sales ended and the dot-com spending boom went bust.
Disney has tried to shore up profits by cutting costs. In January this year, it announced it would shutter its Go.com Internet portal and cut 400 jobs from that division, and in the spring it announced that it would cut another 4,000 jobs, or about 3 percent of its workforce, across all its divisions around the globe.
It opened its new California Adventure theme park in February, but by June it was clear the park was underperforming expectations and Disney began launching discount ticket programs to spur attendance.
While those efforts did help grow attendance, the Sept. 11 attacks have further hurt theme park attendance, particularly at Walt Disney World in Florida which is heavily dependent on tourism.
Since May 22, when most major media stocks began their recent declines, Disney shares have lost some 44 percent, underperforming rivals like Viacom Inc., off 30 percent and AOL Time Warner Inc. off 35 percent.