updated 8/9/2005 7:20:51 PM ET 2005-08-09T23:20:51

Higher television ratings at ABC and increased theme park attendance boosted The Walt Disney Co.’s third-quarter profits.

The media conglomerate reported net income of $851 million, or 41 cents per share, compared to $604 million, or 29 cents per share in the same period last year.

Revenue increased to $7.72 billion in the quarter ended July 2, compared to $7.47 billion in the same period last year.

Analysts surveyed by Thomson Financial had expected earnings of 38 cents per share.

The biggest gains in the quarter came from Disney’s media networks division, which includes the ABC network and cable channels such as ESPN. Operating income from television channels increased by $325 million, or 48 percent, driven mainly by higher rates paid by cable operators for ESPN and higher advertising revenue at ABC. The network continues to enjoy a ratings boost with shows like “Desperate Housewives” and “Lost.”

Operating income at Disney’s theme parks and resorts division grew 6 percent on increased attendance at the company’s two domestic theme parks. The Burbank-based company raised ticket prices at its resorts in Florida and California in anticipation of the 50th anniversary celebration of Disneyland’s opening.

Third quarter results were helped by a $26 million gain on the sale of the Mighty Ducks of Anaheim, the NHL hockey team.

Disney shares rose 73 cents, or 2.9 percent, to close at $26.14 on the New York Stock Exchange, before the income report was released. The stock dropped 45 cents, or 1.7 percent, in after-hours trading.

Revenue and operating income fell at Disney’s film studio and consumer products divisions. The company also recorded one-time losses due to a cable television investment in Latin America and a video-on-demand venture which has been put on hold.

The company confirmed reports that it was considering selling its ABC radio stations.

Disney’s chief financial officer, Thomas Staggs, said the company was talking with several parties about possibly combining Disney’s radio assets with those from another company or selling them outright.

Staggs said neither the Radio Disney network nor the ESPN radio network would be part of any deal.

Excluding those assets, ABC radio generated $203 million in operating income in 2004, Staggs said during a conference call with analysts.

The company said it continues to expect double digit earnings growth through 2007.

Disney said it expects a drop in profits in its studio division for the full year in part because of marketing expenses in the fourth quarter.

The company said it is experiencing the same drop in home video sales that other media companies have seen as the marketplace becomes glutted with films and TV shows and stores are returning product that doesn’t sell quickly.

Company executives did not mention a court victory handed down in a Delaware court Tuesday.

A judge ruled that Disney’s board did not breach its fiscal responsibilities by agreeing to hire Hollywood superagent Michael Ovitz as president in 1995, then granting him a $140 million severance package when he left just 14 months later.

The victory was a boost for Disney, although Chancellor William Chandler III criticized CEO Michael Eisner, who steps down from his post next month.

Eisner hired Ovitz and was widely criticized for the large severance payout. In his ruling, Chandler chided Eisner for not adequately involving the board in business matters and having “enthroned himself as the omnipotent and infallible monarch of his personal Magic Kingdom.”

Incoming CEO Robert Iger, Disney’s chief operating officer, acknowledged Eisner’s assistance during the transition, thanking Eisner for his “incredible support.”

Asked about his agenda after he leaves a post he has held for more than 20 years, Eisner said he has not made any final plans, but they will likely not include fly fishing or golf.

“I suspect I’ll be doing something, but what that is, I have no idea,” Eisner said. “How’s that for a non-answer?”

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