In what is becoming a trend among media companies during the last few weeks, Disney (NYSE: DIS) released results for the quarter ended December 31, 2008 that came in below expectations — and issued sobering guidance for the remainder of 2009. Some details from the call with CEO Bob Iger and CFO Tom Staggs:
— As we reported in our earlier post, starting today Disney is reporting much of its Interactive Media business as a segment; that doesn’t include ABC.com, ESPN.com or any sites operated by other divisions. Pricing pressure and increased production and marketing costs related to video games hurt interactive results in the quarter, but Iger said that the company would invest materially in the interactive segment in 2009 with most of the increased investment being allocated to video games. Iger explained the virtual worlds and mobile content offering within the segment are closer to profitability and will thus need less investment in 2009, providing further indications that this industry is weathering the economic downturn relatively well.
— The Media Networks segment results were significantly below consensus estimates with broadcast revenue decreasing 14 percent during the quarter versus consensus expectations of a 6 percent drop and cable revenues increasing 2 percent versus consensus estimates of 5 percent growth. The significant drop in TV revenue, while driven partly by ratings, is surprising given that Disney
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