Disney was hit hard by the economy in its fiscal first quarter, shares falling about ten percent in after-hours trading.
Wall Street is watching closely to see how the bellwether fares, and for any insight into the entertainment industry and consumer spending. Excluding one-time items the company reported earnings of 41 cents per share, down from a 63 percent profit in the year ago quarter on $9.6 billion in revenue. And while the company usually surprises to the upside, this time analysts were sorely disappointed, the consensus expectation was 51 cents per share on $10.1 billion in earnings.
All eyes were on the theme parks division, which is most susceptible to recession: operating income for the segment fell 24 percent on a four percent drop in revenue. I spoke exclusively with CEO Bob Iger who pointed out that demand for the theme parks are still there, as attendance is fairly strong and bookings for the current quarter and next quarter are running slightly ahead of last year. But this year the company is relying on a "buy four get three free" deal, so margins are falling.