Video: Mouse House report

updated 5/12/2005 9:30:13 AM ET 2005-05-12T13:30:13

Profits rose 30 percent at The Walt Disney Co. in the second quarter, driven largely by the solid performance of such movies as “The Pacifier” and strong DVD sales, the company said.

Increased attendance at its theme parks also contributed to net earnings of $698 million, or 33 cents a share, in the quarter ended April 2, compared to $537 million, or 26 cents a share, in the same period last year.

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 more than an hour earlier than scheduled 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.

The stock drop may have been caused by rumors circulating earlier in the day 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.”

Disney Chief Executive Michael Eisner said the second quarter results are in line with previous estimates of double-digit earnings growth for the year.

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 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.”

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.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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