Downturn hits Disney Q1...

... however consumer products revenues rise thanks to acquisition of Disney Stores North America.
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Costs are set to be reduced further at Disney after the entertainment behemoth reported its Q1 results which saw group turnover and profit both fall.

Robert Iger, Walt Disney's president and CEO, told analysts the company was still looking at "significant" overall cost reductions, including reducing costs of distribution, production and marketing.

"It's an across the board process that does not just involve eliminating jobs," he said.

First quarter net profit fell 32 per cent to $845 million from $1.25 billion in last year's first quarter. Revenue fell eight per cent to $9.6 billion from $10.45 billion a year earlier.

DVD sales of titles such as Wall-E and Chronicles of Narnia: Prince Caspian couldn't reach the heights of previous hits High School Musical 2 and Pirates of the Caribbean: At World's End in the prior year quarter.

This meant studio entertainment revenues for the quarter decreased 26 per cent to $1.9 billion, while segment operating income was down 64 per cent to $187 million.

However, consumer products revenues for the quarter increased by 18 per cent to $773 million, although segment operating income decreased eight per cent to $265 million. The revenue increase was due to the acquisition of the Disney Stores North America.

At merchandise licensing, earned royalty revenue was comparable to the prior year quarter.

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