Walt Disney Co (DIS.N) said park bookings were flat and it had detected weakness in advertising sales in the current quarter, sparking fears that U.S. economic woes will hit its results and sending its shares down 2 percent.
The entertainment conglomerate had earlier on Wednesday reported a fiscal third-quarter net profit that beat analysts' estimates by a hair, rising 8.5 percent on one-time gains and strength at its media networks, including sports channel ESPN.
Caris & Company analyst David Miller said the company "overall did very well," adding that investors may have been spooked by the ad sales slowdown at ESPN and wondering "when is this economic slowdown going to hit the parks, if at all?"
Third-quarter net income rose to $1.28 billion, or 66 cents per share, from $1.18 billion, or 57 cents per share, a year earlier. Revenue rose 2 percent to $9.24 billion.
The earnings, excluding a 4 cent gain from the acquisition of the Disney Stores in North America, the sale of Movies.com and a favorable resolution of prior-year tax matters, beat Wall Street's average estimate of 61 cents per share, according to Reuters Estimates.
Disney Chief Executive Robert Iger said on a conference call with analysts that the company continued "to be pleased with the level of business activity we have seen ... and especially with our long-term market position."
Disney shares ended the June quarter down 11 percent from quarterly highs of about $35, as investors worried about the effects of high fuel costs and economic pressures on consumers and the company's theme parks.
"I don't think the forward-looking comments they made were discouraging, everything put together," Standard & Poors Equity Research analyst Tuna Amobi said. "I don't share the sentiment that things are going awfully wrong."
The theme parks posted a 5 percent rise in revenue and 3 percent gain in operating profit, driven by strong performances at Walt Disney World Resort and Disneyland Resort Paris.
Chief Financial Officer Tom Staggs said hotel bookings at U.S. theme parks were flat in the current quarter, but "modestly ahead" of a year earlier in the holiday quarter ending in December.
He also said pricing for the booked rooms "at this point are at or above the prior year."
Iger said diminished airline capacity to Orlando, Florida, "has not been a factor at all nor do we envision, in the near term anyway, that it will be a factor" in Walt Disney World attendance.
Media networks posted an 8 percent revenue increase and a 9 percent rise in profit last quarter. Staggs said the pace of ad sales "has slowed somewhat in recent weeks" at ESPN and, to a lesser extent, its broadcast network due to softness in the auto, financial services and consumer electronics segments.
Staggs said, however, that spot or "scatter" ad sales were pacing "well ahead" of advance sales in the current quarter.
Studio entertainment, whose disappointing "The Chronicles of Narnia: Prince Caspian" promised to drag on company results, saw revenue drop by 19 percent for the quarter and operating profit fall by 49 percent because of tough comparisons with last year's blockbuster "Pirates of the Caribbean" sequel.
Revenue from consumer products rose 20 percent, mainly due to the acquisition in May of the Disney Stores in North America, but lower sales of self-published video games led to a 4 percent decline in operating profit in the quarter.
Staggs said the company expects to see a "modest" reduction in profits for the rest of this year as a result of its reacquisition of Disney Stores in North America.
Disney shares fell 2.5 percent to $30.86 in extended trade after ending 2.4 percent higher at $31.67 on the New York Stock Exchange.
(Editing by Braden Reddall)
