DISNEY PROFITS SHRINK ABC FLOPS, POST-SEPT. 11 TOURISM SLUMP HURT ENTERTAINMENT GIANT.

Byline: Greg Hernandez Staff Writer

BURBANK - A dismal prime-time television season so far for ABC and slumping ticket sales at U.S. theme parks will drag down Walt Disney Co.'s fourth-quarter and fiscal year-end earnings.

The media giant, which will announce its financial results today, is expected to eke out profits of 7 cents per share for the quarter, down 9 cents from 2000, according to the consensus of 19 analysts polled by Thompson Financial/First Call. For fiscal year 2001, analysts predict 73 cents per share, flat from a year ago.

``Disney was cautionary a month or so ago about their year-end results, and most analysts have tried to poke down their numbers to be a little more defensive,'' said Jeffrey Logsdon, an analyst with Gerard Klauer Mattison & Co. in Los Angeles.

Attendance at Disney theme parks, particularly in Florida, has dropped precipitously due to the decrease in travel after the terrorist attacks Sept. 11. Locally, the Disneyland and Disney's California Adventure theme parks in Anaheim are trying to boost attendance by offering bargain admission prices for Southern California residents through the holiday season.

``It's no mystery that advertising and tourism travel have been impacted by the economy and external events,'' said Logsdon. ``There is more interest in the year ahead than the year behind.''

Stating that 2002 earnings ``are under particular pressure at Disney World and the company's broadcasting division,'' Goldman Sachs analyst Richard Time cut the company's rating this week from ``market outperform'' to ``market perform'' in anticipation of a decline in the company's 2002 fiscal earnings. He did so despite the $62.5 million opening weekend of ``Monsters Inc.,'' a record debut for an animated film.

``Clearly, execution at the ABC network has been way below expectations, and that is something Disney will have to do something about,'' Logsdon said.

One of the fall season's most highly-anticipated comedies, ``Bob Patterson'' starring ``Seinfeld'' alum Jason Alexander, flopped miserably with viewers and critics, and was canceled last week. Also canceled quickly this season were the Joan Cusack comedy ``What About Joan'' and the reality series ``The Mole ll.''

But Kaufman Bros. analyst Paul Kim doesn't believe the outlook for Disney is as grim as others do.

``Our view is that the results will probably be better than what people expect,'' said Kim, who is based in New York. ``We think the market is being overly pessimistic. We view Disney as an outstanding value play in the sector.''

Although most analysts feel that the $5.2 billion Disney paid to acquire cable operator Fox Family Worldwide last month was too expensive, most believe it was a good long-range move for the company to have a fully distributive cable network.

``It should be a decent asset for them because it builds their scale further and enhances their competitive position,'' Kim said.

UBS Warburg analyst Christopher Dixon points out that the company was also hit during the quarter by having to pull two of its movie releases in the aftermath of Sept. 11.

One film, ``Bad Company,'' stars Anthony Hopkins and Chris Rock and cost more than $70 million to produce. The comedy features terrorists as villains and also has a sequence with a suitcase bomb about to explode in Manhattan. The second delayed film, ``Big Trouble,'' stars Tim Allen and Rene Russo and was delayed because of a scene in which a bomb is sneaked onto an airplane past airport security.

But overall, analysts said, Disney had a strong quarter at the box office, highlighted by the surprisingly stellar box office performance of ``The Princess Diaries,'' which swept beyond the $100 million mark this summer, and by strong DVD sales.