Meltdown Cuts Through Disney Magic

The Walt Disney Co., which until the past three months appeared somewhat recession-resistant in its Orlando area theme parks, reported a 13 percent decline in profits from July through September across all segments, including theme parks, merchandise sales, TV and films.

The worse than expected financial results encouraged Disney officials to offer additional enticements to visitors to Walt Disney World in Lake Buena Vista, where Disney operates the Magic Kingdom, Epcot, Animal Kingdom and Disney Hollywood Studios.

During the first six months of next year, people who stay for four nights at a Disney hotel will qualify for an additional three nights free. The company also promised a $200 Disney gift card for early participants in the deal.

In 2009, Disney will allow visitors free admission to Walt Disney Parks and Resorts on their birthdays.

Visitors must show identification and proof of birth date, with additional details at www.disneyparks.com. Birthday visits can be registered in advance.

"People want to take vacations in 2009, but they are much more value-focused," Chief Executive Officer Robert Iger said in a conference call with analysts Thursday. "That's why we have seen the bookings fall off somewhat."

Earnings in the fourth quarter declined to $760 million, or 40 cents a share, from $877 million, or 44 cents a share for the year-ago quarter, in results released Thursday.

Parks and resorts division earnings for the fourth quarter declined from $430 million to $412 million, although revenue rose 6.5 percent to $2.97 billion.

"The quarter was uglier than anyone anticipated," Janna Sampson, co-chief investment officer at Oakbrook Investments, told The New York Times.

"Going forward, it becomes a question of how long and how deep this economic recession will last. And that's very, very difficult to predict."

"Hannah Montana" and "High School Musical" merchandise helped increase Disney's consumer products division income 14 percent to $176 million. Disney film earnings declined 42 percent to $98 million.