Mickey Mouse is having a tough time keeping investors smiling.

Shares of Walt Disney Co. dropped 8 percent yesterday in heavy trading on the New York Stock Exchange to close at $24.31 1/4, down $2.18 3/4, after Chairman Michael Eisner said the company's depressed earnings streak will continue into the new millennium.

On Thursday the entertainment giant announced its results for the fourth quarter, ended Sept. 30. Net income fell 71 percent, to $85 million, from $296 million in the same quarter a year ago, after accounting for the acquisition cost of Infoseek Corp., an Internet company. Revenue fell about 6 percent, from $6.15 billion to $5.78 billion.

Disney, which saw its net earnings fall to $1.3 billion in fiscal 1999 from $1.85 billion in 1998, is the second-largest entertainment group after Time Warner Inc. Disney, based in Burbank, Calif., owns ABC Entertainment Television, Buena Vista Motion Pictures, Disney World, Disneyland, ESPN and other publishing and sports franchise businesses.

Except in its theme parks and resorts, Disney's revenue and earnings have slumped. In its media networks division, Disney has had to grapple with lower prime-time ratings and higher programming costs.

In the studio entertainment business, Disney reported an operating loss of $94 million for the quarter, despite the launch of successful movies such as "The Sixth Sense" and "Tarzan." Home video profit margins were down, too. Even in the popular merchandise-licensing business, Disney was hit by an 8 percent decline in revenue and a steeper 38 percent fall in operating income during the quarter.

Analysts said the market for Disney's toys and other merchandise has been shrinking over the years. Where Disney once tapped into the 3- to 10-year-olds market, analysts said, the company now is left with a much smaller audience in a narrower age group. Disney also is criticized for lacking the aggression and innovation it displayed in its heyday.

"Disney has been spoiled by the success of the last 15 years and has lost control of costs," said Thomas Graves, an analyst at S&P Equity Group.

Disney's recent forays into the Internet and direct marketing haven't performed as expected. For fiscal 1999, Disney's Internet and direct marketing revenue were down 21 percent to $206 million, although the operating loss decreased by $1 million from fiscal 1998's $94 million.

The company's theme parks and resorts have kept the money flowing during the company's roller coaster ride. For the year, theme park and resort revenue rose 10 percent, to $6.1 billion, and operating income jumped 12 percent, to $1.4 billion.