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Disney&#039&#039s Internet unit reports loss, revenue slips

Walt Disney Internet Group (NYSE: DIG) reported a smaller-than-expected loss for its fourth quarter Thursday, but sales declined. The company also said it will start buying back up to 5 million shares on the open market.

The company formerly known as Go.com reported net loss of $65.2 million, or 42 cents a share, excluding charges and gains, on sales of $82.4 million. Sales were down 6 percent from a year ago as direct marketing catalog revenue fell 33 percent. Internet revenue gained 9 percent from a year ago.

According to earnings tracking firm First Call Corp., Walt Disney Internet Group, a tracking stock of Walt Disney (NYSE: DIG) was expected to lose 46 cents a share this quarter. Walt Disney Internet Group's results and First Call estimates excluded non-cash amortization of intangible assets.

Including a host of charges and a one-time gain from the sale of its Ultraseek unit, the company had a net loss of $249.5 million, or $1.61 a share. Much of that loss was attributed to Disney common shares.

For the year, Walt Disney Internet Group reported a mammoth loss. Including gains and charges, the company lost $1.1 billion, or $7.10 a share. Revenue for the year was up 13 percent to $392 million. For its fiscal year, Internet revenue jumped 39 percent as catalog revenue fell 23 percent. Excluding gains and charges, the company reported a loss of $1.50 a share for the year.

In a statement, officials said the fiscal year was about consolidating operations and working with Disney properties such as ESPN and ABC. The company said it will pursue "the growth of Disney's Internet businesses during fiscal-year 2001."

Investors, however, haven't been impressed. Walt Disney Internet Group shares closed Wednesday just above a 52-week low. The malaise is attributed to the "tracking stock discount" and the dot-com woes in general.

Walt Disney Internet Group said its properties were gaining traction and touted its Enhanced TV promotions with Disney properties. As for metrics, the company said average daily page views for the fourth quarter were up 46 percent to 87 million year-over-year. However, traffic declined 5 percent from 92 million in the June quarter. Registered users were up 11 percent sequentially to 87 million.


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