Posted on: Friday, November 21, 2003

Hit films boost Disney profits 137%

By James Bates
Los Angeles Times

For Walt Disney Co., the final quarter of the 2003 fiscal year yielded a treasure trove of earnings, thanks to such hits as "Pirates of the Caribbean: The Curse of the Black Pearl."

The Burbank, Calif., entertainment giant's film studio continued to drive profits, helping blunt disappointing theme park results.

Overall, Disney's profit jumped 137 percent in the quarter ended Sept. 30, to $415 million, or 20 cents a share, which included an unanticipated one-time gain of 3 cents related to resolving a tax issue.

Revenue was up 5 percent from the year-earlier quarter, to $7.01 billion. Results significantly beat Wall Street's expectations.

Disney Chief Financial Officer Thomas Staggs told analysts the company expected to meet or exceed Wall Street's consensus that Disney would earn 84 cents a share in the coming fiscal year.

Disney also is benefiting from a stronger advertising market, which is helping to stem losses at its ABC network while boosting results for its TV and radio stations, and especially at cable networks such as ESPN.

Although results for Disney's theme park division remain soft, the company said it is showing a gradual recovery from the severe tourism downturn. The company also saw improvement at its long-suffering consumer products group.

"It's a great performance for year one of a turnaround," said analyst Jeffrey Logsdon of Harris Nesbitt Gerard.

Media analyst John Tinker of Blaylock & Partners said "the issue is still in the parks," including concern about whether discounting done to attract visitors, and general belt-tightening by tourists, would cut into revenue.

For the fiscal year, earnings rose 3 percent to $1.27 billion with revenue rising 7 percent to $27.1 billion.