Disney sees slowing Q4 ad sales, hotel bookings

By Gina Keating

LOS ANGELES (Reuters) - Walt Disney Co 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.

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."