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DAL , DIS ,,, Disney 2Q Profits Up 30 Pct. on DVD Sales
Thursday May 12, 1:03 am ET
By Gary Gentile, AP Business Writer
Disney Second-Quarter Profits Rise 30 Percent on Strong Performance From Film Studio, DVD Sales


LOS ANGELES (AP) -- Robust DVD sales of the Oscar-winning animated film "The Incredibles" and a solid showing by new releases fueled a 30 percent jump in second-quarter profit for The Walt Disney Co.
Increased theme park attendance also led to earnings of $698 million, or 33 cents a share, in the fiscal quarter ended April 2, compared to $537 million, or 26 cents a share, in the same period last year.

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Revenue increased to $7.83 billion from $7.19 billion in the same period last year.

Analysts surveyed by Thomson Financial had expected earnings of 32 cents a share.

Results were released Wednesday more than an hour before schedule as a precaution after an internal e-mail containing earnings information was sent by mistake, the company said. Trading of Disney stock was halted briefly on the New York Stock Exchange pending the news.

Earlier, investors mulled rumors that Disney was set to announce a sale of its radio stations. ABC owns 71 stations and operates three radio networks, including ESPN Radio and Radio Disney.

Disney's president and CEO-elect, Robert Iger, declined to confirm or deny the report in a conference call with analysts Wednesday.

"We've been in the radio business a long time. It's been a good business for us," Iger said. "As we've said about a number of our assets, we're always open to looking at possibilities of either buying or selling assets, all with an eye toward improving our shareholder value. We're continuing that process."

The stronger results have not pleased everyone. Two ex-board members have escalated their war against the company by filing a lawsuit challenging the process that led to the selection of Iger, who will succeed Chief Executive Michael Eisner in October.

Iger said the lawsuit, filed Monday by Roy E. Disney and Stanley Gold, is without merit.

"I've spent a tremendous amount of time with people who work at this company and they're just plain fed up with all this," Iger said. "They want the rhetoric to end and they want to be allowed to concentrate on what they do best, which is making great product and driving a great company forward. And I'm very optimistic they're going to be able to achieve that."

Also Wednesday, Burbank-based Disney warned it might be forced to write down its $101 million investment in airplane leases it has with Delta Air Lines Inc., which is struggling to avoid bankruptcy. The Atlanta-based airline has remained current with its lease payments, Disney said in its quarterly report to the Securities and Exchange Commission.

Higher attendance and increased guest spending at Walt Disney World Resort in Florida boosted operating income at Disney's theme parks and resorts unit.

Attendance fell slightly at the Disneyland resort in Anaheim, Calif. But the company noted that international visitors increased 20 percent at both domestic parks.

Advance bookings, driven by the Disneyland 50th anniversary celebration, are up by double digits ahead of last year's levels, Disney Chief Financial Officer Thomas Staggs said.

Operating income at the company's consumer products unit shot up 48 percent because Disney no longer carries losses from its chain of retail stores. The stores were sold last year to The Children's Place.

Higher ratings driven by hit shows on Disney's ABC television network also contributed to growth in the quarter, as did higher income from its ESPN and ABC Family cable channels.

Ratings for ABC prime-time were up 15 percent from last year and the network has been able to sell advertising spots at a much higher rate as a result. The network, which has been struggling for several years, will likely turn a profit this year, Iger said.

The network will present its fall schedule to advertisers next week in New York.

For the first six months of the year, Disney reported net income of $1.42 billion, or 68 cents per share, compared to $1.23 billion, or 59 cents per share, for the same period last year. Revenue rose to $16.5 billion from $15.74 billion.





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