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Pix, parks up Disney revs

NEW YORK — Higher earnings from the film studio and theme parks helped drive Walt Disney Co.’s profits up 18% to $473 million in its third quarter, to June 30, on 2% higher revenue of $5.2 billion, Disney re-ported Tuesday.

The one trouble spot was Disney’s ABC television network. Disney doesn’t break out its earnings, but analysts estimated its operating income fell 40% in the quarter to about $40 million. But the network slump was offset by a surging performance at the cable networks ESPN, ESPN 2 and the Disney Channel.

Disney stock jumped $2.43 to $77.62 on the quarterly result, which analysts said was better than expected. “The results were very solid,” Cowen & Co. analyst Harold Vogel said.

Disney stock had drifted down in recent weeks, both because of worries about ABC and expectations that disap-pointing box office performance of “Hercules” would hurt the company’s earnings.

Instead, the House of Mouse reported a richer quarter from its studio than a year earlier, when it had to take write-offs on five live-action releases such as “Celtic Pride,” “Boys” and “Eddie.”

Disney’s “creative content” division, which includes the studio and consumer products, increased operating in-come 17% to $333 million in the quarter on 4% lower revenue of $2.2 billion. In a statement Disney chairman Michael Eisner said he was “particularly pleased” with the division’s performance in the quarter.

A Disney spokesman said the studio released just five pictures in the quarter, compared with eight a year earlier, reducing revenues 18% but also cutting distribution costs. The quarter also was helped by international theatrical performance and domestic home video release of “101 Dalmations,” Disney said.

The broadcasting division, which includes cable, increased operating income 7% to $337 million on 5% higher revenue of $1.6 billion. Disney said the growth was due to “increased advertising revenues and affiliate fees at ESPN and increased subscribers at the Disney Channel,” helped by higher advertising revenues at the TV and ra-dio station group.

“These increases were partially offset by the impact of lower ratings at the television network,” Disney added.

“ESPN was dynamite,” said Schroder & Co. analyst David Londoner, offsetting what he estimated was a 40% drop in operating profit at the ABC network to between $40 million and $50 million. A Disney spokesman did not dispute Londoner’s estimate.

This quarter is the first since Disney acquired Capital Cities/ABC in February 1996 that accounting maneuvers related to the acquisition haven’t inflated the network profit.

Theme parks continued to perform strongly. Revenues rose 10% to $1.4 billion in the quarter, while operating in-come grew 11% to $390 million, helped by “record attendance levels and increased occupied room nights at Walt Disney World.”

Disney’s total operating income rose 11% to $1.06 billion in the quarter. Interest costs rose slightly in the quarter to $185 million.

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