Theme parks have always been the strongest source of profits for Disney, but bookings at Disney World in Florida are down so much that the company has abandoned its profits forecast issued just six weeks ago.

Sales at Disney stores are weak as well, in yet another sign that US shoppers are becoming more reluctant to part with their dollars.

"The situation [in Iraq] and the economic climate, consumer confidence and that type of things could be in great flux over the coming weeks and months," said Disney's chief financial officer Tom Staggs.

The previous profit targets had been based on expectations of a recovery of both the economy and the travel industry "but that improvement has stalled," Mr Staggs warned.

'Modest' earnings

Speaking from a shareholders' meeting in Denver, Mr Staggs told Reuters news agency that with war on the horizon he could not make a more precise profits forecast.

At the beginning of February, Disney had said profits would rise this year by 25% to 35%. Now the company says earnings will be "more modest".

The one bright spot was Disneyland in California, which is a much smaller park than Disney World but within driving distance of millions of people.