Posted on: Thursday, May 12, 2005

Disney profits jump 30% with strong sales of DVDs

By Gary Gentile
Associated Press

LOS ANGELES — 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.

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 yesterday 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 yesterday.

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.

Also yesterday, 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.