Walt Disney Profits Fall by 13%

November 8, 2008 · By Kalyani Mukherjee Filed Under Finance Tagged as: Walt Disney profits

Entertainment conglomerate Walt Disney Co reported that its quarterly profit fell 13% owing to a combination of bad financial decisions and less successful films at the box office.

Walt Disney announced its fourth fiscal results on Thursday which revealed that its profits had come down to $760 million or 40 cents a share in the quarter from a profit of $877 million or 44 cents a share in the same quarter previous year. Revenue however rose 6% to $9.45 billion on improved performance from the company’s cable business as well as theme parks. According to analysts polled by FactSet Research, the company’s profits had been forecast at 49 cents a share on sales of $9.31 billion.

Walt Disney officials revealed that the decline in profits were mainly due to a $91 million bad debt charge on a payment due from financial services firm Lehman Brothers which went bankrupt in September and in the process triggered off a financial meltdown of global proportions.

Chief Executive of Walt Disney Bob Iger said at a conference call that the general slowdown in the economy had also played a major role in the decline of the company’s profits. With shrinking spending power, consumers were cutting down on entertainment expenses and thus bookings at Disney’s theme parks and entertainment venues had fallen considerably over the past month.

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