Well done Epics, your call was but a mere fraction off the mark. Hope this is new bottom (I actually think we might see 30 before 40) but long for the long-haul nonetheless. Following is from today's release:
Disney Reports First Fiscal Quarter Earnings
Business Wire - January 27, 1999 08:14
BURBANK, Calif.--(BUSINESS WIRE)--Jan. 27, 1999--The Walt Disney Company
Wednesday reported earnings for its first fiscal quarter ended December 31, 1998.
Revenues for the quarter increased 4% to $6.6 billion and operating income decreased
8% to $1.4 billion. Net income for the quarter decreased 18% to $622 million and
diluted earnings per share decreased 19% to $.30. These results include the positive
impact of the Company's acquisition of a 43% interest in Infoseek Corporation in
November 1998, as discussed more fully below. Excluding the Infoseek benefit,
operating income, net income and earnings per share were $1.0 billion, $470 million
and $0.23, respectively.
Michael D. Eisner, Chairman and Chief Executive Officer, said, "I am pleased that our
Theme Parks and Resorts have once again posted record performance. I am also
pleased with the domestic box office success, during the first quarter, of 'Enemy of
the State,' 'A Bug's Life,' 'The Waterboy' and 'A Civil Action.' However, our Creative
Content and Broadcasting operating results continue to reflect the challenges we
began facing in 1998, including rising programming and production costs.
Nevertheless, we are continuing to invest in promising new initiatives such as this
month's launch of the GO Network."
Theme Parks and Resorts posted record operating results for the quarter with
revenues increasing 14% to $1.4 billion and operating income up 17% to $335 million.
Theme Parks and Resorts results benefited from record attendance at the Walt Disney
World Resort, driven by the new theme park, Disney's Animal Kingdom. Disneyland
also achieved record attendance, due in part to the successful Christmas Holiday
program.
Creative Content revenues for the quarter decreased 2% to $2.9 billion and operating
income decreased 39% to $430 million.
Creative Content results reflected declines in worldwide home video, Disney Store
and international merchandise licensing, partially offset by the domestic theatrical
success of "The Waterboy," "Enemy of the State" and "A Bug's Life." In worldwide
home video, the strong performance of "The Lion King II: Simba's Pride" was offset
by difficult comparisons to the combined results of "Belle's Enchanted Christmas,"
"The Jungle Book" and "George of the Jungle" in the prior year. Disney Store results
were driven by lower comparative store sales, principally domestically, and soft
international merchandise licensing reflected continued economic weakness abroad.
Broadcasting revenues for the quarter increased 7% to $2.2 billion while operating
income decreased 48% to $265 million.
Higher sports programming costs associated with the new NFL contract, which were
only partially offset by revenue growth, drove the decline in Broadcasting results. In
addition, results at the television network were impacted by higher program
amortization, including a reduction in benefits arising from the ABC acquisition, and
lower news ratings.
On November 18, 1998, the Company completed its acquisition of a 43% equity
interest in Infoseek, an internet search company. In that transaction, Infoseek
exchanged shares of its common stock for the Company's interest in Starwave
Corporation. As a result of the exchange of its Starwave investment, the Company
recognized a non-cash gain of $345 million.
In connection with its investment in Infoseek, the Company recorded a charge for
purchased in-process research and development expenditures, amortization of
intangible assets and its share of Infoseek's operating results.
Net expense associated with corporate and other activities decreased 33% or $26
million for the quarter, reflecting improved results from the Company's equity
investments, including Euro Disney, A&E Television and Lifetime Television.
Net interest expense increased 22% to $164 million, due to gains from sales of
investments in the prior year quarter and higher average debt balances in the current
quarter.
Editor's Note: The Company makes available its quarterly earnings releases, annual
report to shareholders, fact book and SEC filings on its Investor Relations web-site
located at disney.go.com.
CONSOLIDATED STATEMENTS OF INCOME
For The Quarter Ended December 31
(Unaudited; in millions, except per share data)
1998 1997
REVENUES $ 6,589 $ 6,339
COSTS AND EXPENSES (5,559) (4,847)
GAIN ON SALE OF STARWAVE 345 --
OPERATING INCOME 1,375 1,492
CORPORATE AND OTHER ACTIVITIES (52) (78)
EQUITY IN INFOSEEK LOSS(a) (84) --
NET INTEREST EXPENSE (164) (134)
INCOME BEFORE INCOME TAXES 1,075 1,280
INCOME TAXES (453) (525)
NET INCOME $ 622 $ 755
EARNINGS PER SHARE:
Diluted $ 0.30 $ 0.37
Basic $ 0.30 $ 0.37
Average number of common
and common equivalent
shares outstanding:
Diluted 2,076 2,067
Basic 2,050 2,019
(a) Includes purchased R&D write-off and amortization of intangibles.
SEGMENT RESULTS
For The Quarter Ended December 31
(Unaudited; in millions)
1998 1997 % Change
Revenues:
Creative Content $ 2,941 $ 3,015 (2%)
Broadcasting 2,214 2,064 7%
Theme Parks & Resorts 1,434 1,260 14%
Total $ 6,589 $ 6,339 4%
Operating Income: (a)(b)
Creative Content $ 430 $ 700 (39%)
Broadcasting 265 505 (48%)
Theme Parks & Resorts 335 287 17%
1,030 1,492 (31%)
Gain on Sale of Starwave 345 -- n/m
Total Operating Income $ 1,375 $ 1,492 (8%)
(a) Includes depreciation
and amortization (excluding
film and television costs) of:
Creative Content $ 51 $ 52
Broadcasting 137 134
Theme Parks & Resorts 120 98
$ 308 $ 284
(b) 1998 and 1997 amounts include amortization of intangibles of
$108 and $106, respectively.
CONTACT: The Walt Disney Company, Burbank
John Dreyer, 818/560-5300
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