LOS ANGELES - The Walt Disney Co. missed analyst targets Tuesday, as it reported a 32 per cent decline in quarterly profits amid a downturn that Chief Executive Robert Iger described as "likely to be the weakest economy in our lifetime."
Shares in Burbank, Calif.-based Disney, fell US$1.87, or 9.1 per cent, to $18.75 in after-hours trading.
Iger said the recession had hurt all of Disney's businesses in the three months to Dec. 27, from its theme parks to its broadcast networks.
Net income fell to $845 million, or 45 cents per share. In the same period a year earlier Disney earned $1.25 billion, or 63 cents per share.
Revenue fell eight per cent to $9.60 billion.
Disney's movie studio suffered a stunning 26 per cent drop in revenue due to a weaker lineup of home video selections, a collapse Iger also blamed on the increasing ability of consumers to access video online.
"Competition for people's time is increasing and the abundance of choice is allowing consumers to be more selective," he told analysts on a conference call. "This clearly has had an impact on broadcast television and may have a long-term potential impact on the DVD business."
"In essence, we don't believe the changes we are seeing in consumer behaviour can all be attributed to a weak economy, and we feel it is important for us to address them as more than just cyclical issues," he said.
After excluding a one-time gain from selling investments in two pay TV services in Latin America, Disney's earnings per share hit 41 cents.
Analysts surveyed by Thomson Reuters had expected, on average, earnings of 52 cents per share on revenue of $10.1 billion.
Disney's studio revenue dropped to $1.95 billion. The company said stronger DVD releases a year ago, including "Pirates of the Caribbean: At World's End" and "Ratatouille," outperformed the holiday releases this year, including "WALL-E" and "The Chronicles of Narnia: Prince Caspian."
Revenue at the cable networks such as Disney Channel and ESPN rose two per cent to $2.45 billion, but broadcasting revenue at ABC declined 14 per cent to $1.45 billion.
Parks and resorts revenue fell four per cent to $2.67 billion as attendance at the company's U.S. theme parks and hotel occupancy at its domestic resorts declined.
Consumer products revenue grew 18 per cent to $773 million, reflecting that the company took back control of its chain of Disney Stores in North America.
Interactive media revenue, its video game and online unit, was broken out for the first time and showed a 13 per cent gain to $313 million.
