Disney profits fall again for third straight quarter

Disney's resilience to the deep global depression is beginning to show signs of weakness. After Disney reported it's earnings this week for the third quarter, Disney faces a real risk of seeing a decline in attendance despite historic promotions.

During this challenging marketplace, fiscal financial results revealed a 7% fall in Disney park room reservations for the same time last year and they expect it to continue. Even it's sprawling media portfolio felt the impact as economic downturn began exacting tolls said the Burbank-California companies report.

The drop from $1.3 billion to $954 million during this quarter reflected a 26% decline in profit for the fiscal year. Disney's theme parks, dvd sales and merchandise royalties continued to wain as Disney earned only 52 cents per share barely meeting Wall Street estimates.

Due to widespread discounts and lower spending on merchandise, Disney's hotel and average ticket prices fell 6% reflecting lower revenues compared to same quarter last year. Still, the huge discounts propped up attendance surpassing one year ago by 3%.

Company execs used some hyperbole claiming to be ahead of last year in fourth-quarter room reservations when in fact Disney's fiscal year included 1 additional week. When factoring out the additional week, Disney lagged behind last years revenues by an estimated 7%.

Disney's Bob Iger has hoped that discounts would increase consumers price to value perception that may provoke returning customers in the future. Many analysts believe that Iger's basic concept of attracting potential customers who otherwise would not come is inaccurate, but that Disney is "cannibalizing future theme-park business by persuading travelers who were planning to take a trip later this year" to travel immediately.

Disney recognizes that many economically minded consumers are seeking for value which could promote additional discounts and first-of-their-kind offers in the months ahead. These comments may suggest that Disney not see an end of the downturn in sight.

Although we reported recently that the growing cable network ABC & ESPN were sustaining the company, the lastest report shows a 13% decline due to reduced advertisment sales.

Even after the less than gratifying fiscal report this quarter, Disney is still determined to continue widespread discounts to maintain customer expected value and exposure to the Disney brand.