Disney profit doubles on networks, studios

Los Angeles, Nov 10: The Walt Disney Co said its quarterly profit doubled on strong results for its films, TV networks and theme parks, but its shares fell two per cent after touching a five-year high in regular trade.

Disney said US hotel bookings were flat in the current quarter and it was revisiting terms of its previously announced sale of radio assets to Citadel Broadcasting Corp.

Sanders Morris Harris analyst David Miller described that as the driver for the after-hours stock drop, despite a ''stellar'' quarter. The shares had hit their highest level since mid-2001, and were trading at a small premium to Disney peers.

Expectations for the company have risen since Chief Executive Robert Iger took over last year and began an aggressive series of moves including buying Pixar Animation Studios, cutting production and staff at the film division, and offering TV shows and movies for sale on the Internet.

In the fiscal fourth quarter, studio entertainment posted the biggest rise in revenue of all Disney units, growing 33 per cent to 2.0 billion dollars, and turned an operating profit of 214 million dollars, compared with a 313 million dollars loss a year earlier.

In July, Disney cut about 20 per cent of its studio workforce and said it would trim movie output by about half.

Disney reported a fourth-quarter net profit of 782 million dollars, or 36 cents per share, compared with 379 million dollars, or 19 cents per share, a year before.

Revenue rose 14 per cent to 8.8 billion dollars from 7.7 billion dollars in the year-ago quarter. Analysts, on average, expected net earnings of 33 cents per share and revenue of 8.7 billion dollars for the fourth quarter, according to Reuters Estimates.

Media networks revenue, boosted by higher advertising rates at sports network ESPN and for ABC primetime hits such as ''Desperate Housewives'' and ''Grey's Anatomy,'' were up ten per cent and operating profit rose by 18 per cent.

Iger told analysts on a conference call that Disney was close to signing a long-term programming deal with Comcast Corp. in the next week, but would not discuss terms.

Disney expects to close the sale of ABC radio to Citadel in the first half of 2007, Chief Financial Officer Tom Staggs said, adding that Disney discussed possible modifications to the deal to facilitate Citadel's post-closing financing.

Spot TV ad sales were ''solid'' in the current quarter, with primetime ad rates pacing ahead of 2006 advance ad rates by low single digits, Staggs said. Ad sales at Disney owned-and-operated TV stations were up by double-digit percentages this quarter due to political advertising.

Attendance rose at parks and resorts in the fourth quarter, along with per capita spending and hotel occupancy, driving up division revenue by 8 per cent and operating income by 28 per cent.

Staggs said hotel bookings at domestic parks for the quarter ending in December were in line with a year ago, when Disney had record holiday attendance.

Consumer products, which earns the smallest portion of Disney revenue and operating profit, grew revenue by nine per cent, while operating profit rose just 1 per cent over a year ago.

Disney shares rose 28 percent during fiscal 2006 as a bumper crop of strong movies and shows, including ''Lost'' and ''Grey's Anatomy,'' ''Pirates of the Caribbean: Dead Man's Chest,'' and ''Cars'', fueled growth in all its business units.

''The big winner in the quarter was studio entertainment,'' analyst Jeff Logsdon of BMO Capital Markets said. ''They had a phenomenal summer at the box office globally with 'Pirates', and 'Cars' domestically.'' The stock rose eight per cent in the quarter and traded on Thursday at 19.6 times Disney's estimated fiscal 2007 profit, while Time Warner Inc. shares trade at a multiple of 19.4 times forward earnings and Viacom Inc at 17.5.

Shares of Disney fell to .85 in after-hours trade from a close of 33.58 dollars on the New York Stock Exchange.

REUTERS