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Mouse makes money

Disney profits spike 85% over fiscal year

HOLLYWOOD — A weak film slate couldn’t stop Disney last quarter, as strong performance across all other divisions led it to healthy growth for the quarter and fiscal year ending Sept. 30.

Profits rose a healthy 24% for the quarter and a dramatic 85% for the year, coming in at $516 million and $2.3 billion respectively.

Revenue was $7.5 billion for the quarter and $30.7 billion in the fiscal year, up 8% and 14% respectively.

“By any measure, 2004 was an outstanding year for the Walt Disney Company,” said CEO Michael Eisner.

Investors didn’t get any info about the juiciest issues facing the conglom, though. In an investor conference call, Eisner didn’t talk about progress toward finding his successor, the future of troubled specialty film division Miramax, or prospects in the ongoing shareholder lawsuit over Michael Ovitz’s brief reign as president.

Execs stuck to the financials. CFO Thomas Staggs said Mouse House would generate double-digit earnings growth again in the new fiscal year, although the current quarter would look weak due to a spectacular holiday season last year, when it released DVDs of “Finding Nemo” and “Pirates of the Carribbean.”

Holiday hits help

Last year’s holiday hits helped drive studio entertainment revenue up 18% for the year to $8.7 billion and upped operating income 7% to $662 million. But weak showings for “King Arthur” and “The Village” drove revs down 14% last quarter to $1.9 billion and sunk operating income 89% to a tiny profit of $23 million.

Strong performance by cable networks ESPN, ABC Family and Disney Channel continued to boost Mouse House’s media networks segment, as revenue grew 8% for the year to $11.8 billion and 10% for the quarter to $2.9 billion. Opearting income was up a dramatic 79% for the year at $2.2 billion and 50% for the quarter to $448 million. Cable operating income grew by $748 million for the fiscal year, while ABC upped its operating income by $208 milion despite its weak season last year.

Figure doesn’t include the dramatic boost in ABC’s ratings since it launched hit shows “Desperate Housewives,” “Lost” and “Wife Swap” this fall. Because alphabet net sold most of its ad inventory with lower expectations during upfront, it won’t benefit from the higher ratings until it starts generating significant new ad sales in January.

Consumer product revenue was up 7% for the year to $2.5 billion and 10% in the quarter at $618 million, while opearting income rose 39% to $534 million for the year and 43% to $146 million in the quarter. Mouse House recently sold its Disney Store chain in North America to Children’s Place. (Daily Variety, Oct. 21).

Parks and resorts division grew revenue 21% for the year to $7.8 billion and 31% for the quarter to $2.2 billion. Operating income was up 17% for the year to $1.1 billion and 25% for the quarter at $282 million.

Looking forward, Disney is aiming to invest primarily in more original franchises, new technology, and international expansion.

Looking to China

Company’s particularly excited about China, where it’s expanding its ESPN brand and creating new retail outlets. Execs also pointed to India as a key market for expansion.

In technology, Disney’s looking to grow its small share of the booming vidgame market, both through internal investment and possible acquisitions.

Disney shares closed down 1% Thursday at $26.37 before earnings were announced.

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