• by Wayne Friedman , November 11, 2010

Theme parks and its TV networks pulled down Walt Disney Co. fourth-quarter results. Net profits sank 7% to $835 million -- a bit under analysts' expectations. Revenue slipped 1% to $9.74 billion at Walt Disney Co. -- below estimates, which expected $9.95 billion.

Net profit at Disney's cable and broadcast networks dropped 18% to $1.21 billion, with revenue sinking 7% to $4.4 billion. Disney had some poorer comparisons to a year ago, when ESPN garnered $524 million in previously deferred revenue. There was also a $58 million charge related to programming writeoffs at A&E/Lifetime.

Breaking down the media networks, cable networks witnessed a 6% drop in revenue to $3.1 billion; broadcasting went 7% lower to $1.3 billion.

Operating income fell as well for cable -- 28% to $1.1 billion, due to a decrease at ESPN and lower cable equity income driven by the programming writeoffs at A&E/Lifetime. Still, operating income at its broadcasting unit -- where the ABC network and its stations reside -- fell to $147 million during the period from $2 million.

For broadcasting, revenues decreased at ABC Studios productions, primarily due to the prior-year domestic syndication sales of "According to Jim" and "Grey's Anatomy." Despite higher advertising at the stations, ad revenue at ABC Television Network was down, due to lower ratings and the impact of one less week of operation, partially offset by improved rates.

Still, Bob Iger, president and CEO of Walt Disney Company, told analysts during an earnings call that "the advertising marketplace is incredibly strong."

Disney would not reveal any cable subscriber revenues it gained from a major new agreement struck with Time Warner earlier this year. Iger did say the deal will result in many new products, including ones related to ESPN. Overall, Disney said there has been 10% growth in cable subscriber fees in its calender-year financial results.

At its Walt Disney Studio Entertainment group, revenues grew 6% to $1.6 billion and operating income was $104 million -- a turnaround from a $13 million loss. Improvement came from worldwide theatrical results of "Toy Story 3," "Alice in Wonderland" and "Iron Man 2."

Domestic home entertainment climbed primarily due to lower distribution and marketing expenses. Key current-year releases included "Up," "Alice in Wonderland" and "Princess and the Frog."

Earnings at the theme parks and resorts fell 8% to $316 million on higher costs and decreased results at Disney Vacation Club; revenues went 1% higher to $10.8 billion. Disney's consumer-products segment saw income jump 22% to $184 million; the interactive media unit narrowed its loss to $104 million from $114 million.

Concerning Google TV, Iger said he wasn't going to address the new service. Recent reports say Walt Disney rebuffed Google TV in its efforts to carry ABC and other TV network programming on Google's new TV-Internet services.

However, Iger said Disney would look to continue to bolster businesses on many different screens and platforms where it could retain value. He said it was in Disney's best interests to help support multichannel video distributors, such as the big cable system operator, Time Warner.