Entertainment giant The Walt Disney Company reported net income for its fiscal first quarter down from $356 million a year ago to $63 million for the current quarter.  Still Disney managed to beat Wall Street's expectations thanks to better than expected performances from its film and theme park divisions.  Stock analysts had already factored in the $253 million dollar loss incurred when the mouse house dumped its ill-fated Internet venture, the Go Network (now Gone).  Disney, like the other studios, also had to deal with changes in reporting film advertising and other charges.  If the Internet losses and accounting changes are factored out, net income actually grew from 516 million dollars a year ago to 594 million dollars in this quarter.

 

In addition to an overall solid performance from its year 2000 film releases (see 'Record Year Disappoints'), Disney benefited from a superb performance in the video field where it beat the other studios by a wide margin.  Theme parks also did very well for Disney, and buoyed by the success of the Millionaire television quiz show, the Disney media networks posted a modest 6% gain.

 

As reported by ICv2, sales at the studio theme stores continue to decline (see 'AOL De-'Bugs' Retailing'), and the performance of the Disney stores echoed the trend with a 13% decline in income.  With AOL/Time Warner divesting itself of its Warner Studio Stores, it should be interesting to see what strategy Disney adopts for its much larger chain.  This is certainly a point of vulnerability for Disney whose media networks and theme parks could also be hurt if the economy continues to slow down.