Disney Profit Rises 12%, Boosted by TV Networks

Walt Disney reported a 12 percent rise in quarterly profit, driven by its television networks and US theme parks, but revenue slightly missed expectations.

Disney corporate headquarters in Burbank, California.
Reed Saxon
Disney corporate headquarters in Burbank, California.

Sports network ESPN reported a rise in advertising revenue, and the unit recognized previously deferred revenue as well, driving network growth. With Disney's theme parks, a drop in Hong Kong Disneyland's results offset improvement elsewhere.

The second-largest U.S. entertainment company said net income rose to $877 million, or 44 cents per share, from $782 million, or 36 cents per share, in last year's fiscal fourth quarter. Quarterly revenue rose 3 percent to $8.9 billion.

Excluding a one-time tax benefit, the entertainment company reported a profit of 42 cents a share, compared with 36 cents a share, a year earlier.

Analysts expected Walt Disney to turn in a profit of 41 cents a share in its fiscal fourth quarter, on revenue of $8.98 billion, according to a consensus compiled by Thomson Financial.

Shares of Disney declined about 1 percent in after-hours electronic trading after closing at $33.63 Thursday.

Media networks revenue rose 14 percent to $4.0 billion in the quarter, while operating income at the segment rose 25 percent to $1.1 billion. Parks revenue rose 10 percent to $2.8 billion, while the unit's income rose 9 percent to $430 million.

Chief Financial Officer Tom Staggs said on a conference call Hong Kong Disneyland creditors had agreed to amend debt covenants and that Disney would forego royalties for a couple of years.

Staggs later told analysts that he did not see indications of an economic downturn in travel, tourism or ad markets.

The studio posted a 24 percent decline in revenue to $1.5 billion compared with a year earlier, when Disney's "Pirates of the Caribbean: Dead Man's Chest'' was playing, and consumer products revenue rose 5 percent to $590 million.

Like rivals Time Warner and Viacom, Disney is benefiting this year from an unprecedented string of box office blockbusters and strong cable advertising rates. A weak dollar also boosted visitation to Disney resorts and theme parks, as U.S. vacationers stayed closer to home.

Disney's share price rose less than 1 percent in its fourth quarter ended Sept. 29. The stock was trading at a multiple of 15.7 times estimated 2008 earnings, compared with 15.7 for Time Warner and 15.6 for Viacom, according to Reuters Estimates.

- Reuters contributed to this report.