Disney (NYSE:DIS) is doing better than you think.

Sure, shares of the family entertainment giant have fallen by 35% since peaking in May. The first wave of headlines about its fiscal fourth-quarter report also haven't been kind.

  • "Disney's Not So Magical Moment," reads Forbes.com.
  • "Disney Net Slips as Slump Hits Home," goes The Wall Street Journal.
  • "Disney Misses Estimates as Theme Parks Suffer," says CNBC.

Now, if I can just borrow Mickey Mouse from the media firing squad for a moment, I want to point out that the report released Thursday night was actually pretty respectable. Blindfold off, Mickey. Now run!

Did Disney's net slip? Sure. Posted earnings of $0.40 a share for the quarter did clock in well below last year's $0.44 a share. However, once you back out a $91 million bad-debt charge related to its unfortunate receivable from Lehman Brothers, and a favorable tax resolution from last year's quarter, earnings on a per-share basis actually rose from $0.42 to $0.43.

Are the theme parks suffering? That's debatable. The company's parks and resorts division posted a 7% increase in revenue. Operating income did drop 4%, but that's the result of higher labor costs and the spike in fuel costs at its cruise line (which have since retreated dramatically).

I'm not suggesting that everything is zip-a-dee-doo-dah-riffic at Disney. Even on an adjusted basis, this is the first time that Disney has missed analyst estimates since CEO Bob Iger took over.

However, where is the love for the dependable ESPN and Disney Channel cable revenue, which is helping soften the blow of lower ad revenue at ABC? Where is the euphoric applause for the boost in Disney's consumer-product division from the popularity of Hannah Montana and High School Musical merchandise? 

These aren't banner times in the media industry. News Corp. (NYSE:NWS) shares were slammed this week after the company talked down its guidance. CBS (NYSE:CBS) shares fell on the week, even after increasing initially when the company reassured investors that it would keep its beefy dividend. Others, like Time Warner (NYSE:TWX) and Viacom (NYSE:VIA), are holding up with their steady cable properties, but also feeling the sting of the fading advertising market.

So hang in there, Mickey. Keep dodging the premature firing squad. Things aren't great, and they won't get any better in the near term. However, the haircuts on the share prices in the sector are wildly disproportionate to the slip in fundamentals.

Recession or worse, entertainment still matters.   

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Longtime Fool contributor Rick Munarriz is mad about the Mouse and owns shares in Disney. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.