The economy has resulted in many people choosing not to take vacations - which has effected Walt Disney Co. profits for the second quarter dramatically , a whopping 46% drop in net income.  In an effort to reassure investors, Disney management dropped hints that the declining economy seems to be easing up.

Disney’s net income fell to 33 cents a share for the quarter ending March 28, which was worth 58 cents a year earlier.  The brunt of the recession appears to be hitting Disney’s parks.

According to Robert A. Iger, Disney Chief Executive, action was taken to keep visitors coming to Disney’s domestic parks, which had a predictable impact on margins.  Discounted hotel rates resulted in increased attendance during the quarter when Walt Disney attendance decreased 1%, and Disneyland at Anaheim had a 2% gain.  This helped increase occupancy, but also resulted in a 17% drop in spending per room.

Disney’s broadcasting business continued to be weak due to decreases in local ad sales, resulting in decreased revenue at Disney’s television stations.  Higher international sales of “Criminal Minds”, “Ugly Betty” and “Desperate Housewives” helped balance program expenditures.

In recent years, ABC has been unsuccessful in launching a new hit show.  Ratings have slid 3%, which could mean a rough ride in coming months.  The advance sale of commercial time will soon begin, and it is believed ABC will have a hard time maintaining its share of revenues due to advertisers having to pay increased rates for a smaller viewing audience.

Revenue also slipped for Disney’s interactive media group, which fell 17% to $129 million.  This loss was caused by a reduction of sales in Disney’s video games.

This entry was posted on Friday, May 22nd, 2009 at 12:12 pm and is filed under Economy, Resort Operator News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.