On Feb. 5, mouse-eared media mastodon Walt Disney (NYSE: DIS) released first-quarter earnings for the period ended Dec. 29, 2007. (For background, check out Rick Munarriz's take on Disney's quarter, including why the EPS decrease is deceiving.)

  • As always, Disney's biggest moneymaker was the media networks segment, with 40% of the operating income. Parks and movies ran neck-and-neck at about 23% each, and consumer products accounted for 14% of the profits.
  • Every reportable segment grew sales by at least 10% compared to the year-ago quarter, and operating income by 25% or more. Well, all except one.
  • That would be the filmed entertainment division, where revenue was flat and income was down 15%. The film slate and DVD release schedule this holiday season were pretty good, but they just couldn't measure up to last year's smash hits.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$10,452

$9,581

9.1%

Net Profit

$1,250

$1,701

(26.5%)

EPS

$0.63

$0.79

(20.3%)

Diluted Shares

1,989

2,148

(7.4%)

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Operating Margin

19.5%

17.5%

2.0

Net Margin

12%

17.8%

(5.8)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$3,414

$2,437

40.1%

Accounts Rec.

$6,994

$6,313

10.8%

Inventory

$731

$1,185

(38.3%)

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable + Accrued Liabilities

$7,084

$6,916

2.4%

Long-Term Debt

$12,785

$10,629

20.3%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash From Ops.

$662

$492

34.6%

Capital Expenditures

$249

$245

1.6%

Free Cash Flow

$413

$247

67.2%

Owner Earnings

$1,386

$778

78.1%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

News Corp. (NYSE: NWS)

$61,270

18.8

***

Walt Disney

$56,622

13.4

****

Time Warner (NYSE: TWX)

$55,665

12.4

***

Carnival (NYSE: CCL)

$34,075

13.8

***

Marvel Entertainment (NYSE: MVL)

$2,247

19.5

****

Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

Related Foolishness:

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Fool by Numbers provides raw earnings information in a timely, convenient package. But since numbers never provide the whole story, check Fool.com for more in-depth discussion of the meaning behind the earnings.

At the time of publication, Anders Bylund was a Disney shareholder, but had no other position in any company mentioned. Fool rules are here.