Weak video slate drags Disney earnings

By Jennifer Netherby -- Video Business, 8/1/2007

AUG. 1 | A weak home video slate dragged down operating income in Walt Disney Co.’s studio entertainment division during the latest quarter, the studio reported Wednesday.

Even so, the company reported strong overall results and touted its theatrical performance in the quarter of Pirates of the Caribbean: At World’s End and Ratatouille.

Overall, Disney net income was up 14% to $1.2 billion for the fiscal third quarter ended June 30, driven by media networks, parks and resorts and consumer products. Revenue grew 7% to $9.05 billion.

In the studio entertainment division, however, operating income slid 20% to $192 million, with no home video title comparable to the prior year’s The Chronicles of Narnia: The Lion, the Witch and the Wardrobe, which sold more than 18 million DVDs. Revenue in the division was up 4% to $1.8 billion.

International performance of At World’s End helped partially offset the home video decline, the studio said. But the strong domestic performance of Pirates in theaters was offset by increased marketing costs for Disney/Pixar’s Ratatouille.

CEO Bob Iger said the studio plans to release a DVD and Blu-ray Disc package with all three Pirates movies, but no date has been announced.

Disney and Wal-Mart will do the biggest promotional program ever for High School Musical 2, which premieres on TV Aug. 17 but has no DVD release date yet, Iger said. He didn’t give any details beyond that.