Disney profit rose 20% in quarter

Theme park, cable TV revenues bolster results

August 11, 2004|By BLOOMBERG NEWS

BURBANK, Calif. - Walt Disney Co., the second-biggest U.S. media company, said yesterday that its fiscal third-quarter net income climbed 20 percent, boosted by higher revenue from its theme parks and cable-television networks.

Profit rose to $604 million, or 29 cents a share, from $502 million, or 24 cents, a year earlier, the company said. Sales in the quarter that ended June 30 increased 17 percent to $7.47 billion.

Disney Chief Executive Officer Michael D. Eisner is benefiting from a rise in attendance at Disney's parks after the introduction of new attractions such as Mission: Space at Walt Disney World in Florida. Advertising rates climbed at some of Disney's cable channels, including the ESPN sports network.

"Every ride that they can add, it helps," said Victor Hawley, a fund manager at Los Angeles-based Reed, Conner & Birdwell Inc., which owns millions of Disney shares among its $2.9 billion in assets. "There are more people working this year than a year ago, and foreign travel is starting to pick back up."

Disney was expected to earn 27 cents a share, the average estimate of 24 analysts polled by Thomson Financial. Sales were expected to rise to $7.15 billion, the average estimate of 16 analysts.

Disney said sales and profit at the parks unit was boosted by higher attendance and occupancy from U.S. and international visitors to Walt Disney World. The company noted the "continued success" of Mission: Space, Mickey's PhilharMagic and Disney's Pop Century Resort hotel.

At Disneyland in Anaheim, Calif., higher guest spending and attendance were offset by higher expenses. About $332 million of park revenue was attributed to the balance-sheet consolidation of Euro Disney and Hong Kong Disneyland.

Operating income at Disney's parks and resorts rose 20 percent to $421 million. Revenue rose 32 percent to $2.29 billion.

Operating income at Disney's media networks unit, which includes ESPN and the ABC broadcast network, rose 15 percent to $673 million. Revenue rose 8.2 percent to $2.93 billion.

At Disney's studio unit, which includes Walt Disney Studios and Miramax Films, operating income fell 61 percent to $28 million. Revenue rose 19 percent to $1.71 billion.

Operating income at Disney's consumer products unit, which includes the Disney Store chain and products licensed to retailers, almost doubled to $76 million. Revenue rose 8.9 percent to $541 million. Disney said it recorded a $56 million charge for Disney Store closings and the expected terms of the sale of the unit.

Disney's shares rose 50 cents to close at $22.44 yesterday on the New York Stock Exchange. They have fallen 48 percent from a high of $43.63 in April 2000.

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