Walt Disney the world’s biggest media company, reported second-quarter profit that exceeded analysts’ estimates after cutting jobs at its parks and TV division.
Net income totalled $613 million, or 33 cents a share, the Burbank, California-based company said last night in a statement.
Sales of $8.09 billion also topped projections.
Disney has raced to stay ahead of the slumping economy by discounting vacation prices and by eliminating jobs at the resort and television divisions.
The recession has cut spending by tourists in Florida and California and reduced advertising sales at ABC TV. The company incurred $305 million in costs for severance and the writedown of broadcast licenses.
In last year’s second quarter, Disney posted net income of $1.13 billion, or 60 cents a share, on sales of $8.71 billion. The recession has cut into results at Disney’s biggest businesses - theme parks, television and film.
Park revenue fell 12 per cent to $2.41 billion in the quarter ended March 28th, while profit fell by half to $171 million. Disney discounted prices at its theme parks and hotels, resulting in less spending per visitor.
Reservations for the current quarter, Disney’s third, are “modestly above” a year earlier, Tom Staggs, Disney’s chief financial officer, said today on a conference call.
The company is close to an agreement to expand its park in Hong Kong, chief executive officer Robert Iger said.
Sales from media networks, which include the ABC broadcast business, and the Disney Channel and ESPN cable outlets, rose 2 percent to $3.62 billion.
Cable revenue gained 4 per cent to $2.2 billion, boosting profit 4.6 per cent to $1.14 billion.
Bloomberg