Disney Earnings Drop 37 Percent:
By DAVID GERMAIN
AP Business Writer
LOS ANGELES (AP) -- Walt Disney Co. reported that fourth-quarter earnings fell 37 percent as merchandising and other revenues continued to slump, and the company incurred a $132 million restructuring charge to reduce overhead.
Disney's net income for the three months ending Sept. 30 was $85 million, or 4 cents a share, on revenues of $5.78 billion, down from $196 million, or 14 cents a share, on revenues $6.15 billion, in the same period last year.
Net income before the restructuring charge was $212 million, or 10 cents a share. The charge covers severance packages from job cuts and other efforts to cut costs.
For its full fiscal year, Disney's earnings were $1.30 billion, or 62 cents per share, on revenues of $23.4 billion, down from $1.85 billion, or 89 cents per share, on revenues of $23.0 billion, in 1998.
As revenues have weakened, Disney's stock has sagged from a yearlong high of nearly $39 last January to a low of $23.37 1/2 last month.
''I don't see what's happening in the current quarter as anything different than the last several quarters,'' said Katherine Styponias, an analyst for Prudential Securities. ''There are clear drivers of earnings for Disney that have sort of flattened out.''
Merchandising and sales at Disney's studio stores have been soft, while home video sales have lagged compared with a year ago, when releases included some classic animated reissues that sold well.
Buoyed by the animated hit ''Tarzan'' and the surprise blockbuster ''The Sixth Sense,'' Disney had a solid but unspectacular year in theaters compared to 1998, when hits such as ''Armageddon'' and ''The Waterboy'' helped make Disney the box-office leader with $1.1 billion, Styponias said.
''They did just OK,'' Styponias said. ''Not all of their films performed as well as they would have liked.''
Disney's theme parks and resorts remain strong, with revenues in that division rising 10 percent to $6.1 billion for the year. The company this week announced a deal to build a new park in Hong Kong. The deal was structured so Hong Kong taxpayers will bear most of the Construction cost, potentially minimizing Disney's risk.
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