Mickey Mouse Is Going to Have a Cow

So much for the idea that Disney (NYSE:DIS) is the happiest place on Earth.

The family-entertainment giant stumbled badly in its latest quarter. Revenue fell by 8% to $9.6 billion during the first quarter, weighed down by sluggish television advertising, slower turnstile clicks at its theme parks, and a tough slate of DVD releases relative to last year's winners.

Earnings fell by 35% to $0.41 a share before an investment sale gain. Analysts were expecting a profit of $0.51 a share on $10.1 billion in revenue. It's the second quarter in a row that Disney has come up short, and that's after blowing past Wall Street's bottom-line targets consistently during the early part of CEO Bob Iger's tenure.

The media titan's strongholds proved weak, with declines in media networks (5%), parks and resorts (4%), and studio (26%). Operating margins deteriorated in all three areas. The company scored gains in consumer products as the result of its Disney Store acquisition from Children's Place (NASDAQ:PLCE) along with a healthy 13% jump in interactive media, but those two subsidiaries make up less than 10% of the revenue.

Everyone knows that the economy is in a funk, and that means that even zealous Jonas Brothers fans are taking a breather.

Disney can't afford to be off. It's not like fellow park operators Cedar Fair (NYSE:FUN) and Six Flags (NYSE:SIX), which hibernate during the fall and winter and have a long-shot crack at sleeping through the malaise if the economy bounces back this summer. Disney's wheels are always turning.

It doesn't help that Disney is now two years removed from its most recent Pirates of the Caribbean flick. One can argue that Miley Cyrus and High School Musical have also run their course.

Getting pumped about the current quarter is tough, too. Beyond the advertising headwinds and escalating cable programming costs that also smacks around rivals such as Viacom (NYSE:VIA), CBS (NYSE:CBS), and News Corp. (NYSE:NWS), investors need to brace themselves for a dud at the theme-park level, too. Disney isn't alone in pushing out some massive discounts, including its free birthday admission and the "buy four nights, get three nights free" promotion. The calendar is going to betray the company.

Disney suffered a $40 million shift in operating profits when Easter went from being a fiscal third-quarter event to a second-quarter holiday break. Easter falls in April this year, so the quarter that ends in March is going to have an even harder act to follow.

The family-entertainment powerhouse has weathered financial downturns over the decades. It will bounce back this time, too. For Disney's sake, let's just hope it happens sometime before High School Musical 27 -- or when the Jonas Brothers are renamed the Jonas Grandfathers.

M-I-C ... see these other headlines:

• Don't Pity the Theme Parks
• Why Is Everybody Picking on Disney?
• The Stocks You Should Own