Nov. 12 (Bloomberg) -- Walt Disney Co., the world’s largest media company, reported fourth-quarter profit rose 18 percent, exceeding analysts’ estimates, on higher fees from pay TV operators that carry its ESPN sports programming.

Net income increased to $895 million, or 47 cents a share, from $760 million, or 40 cents, a year earlier, Burbank, California-based Disney said today in a statement. Excluding one-time items, profit of 46 cents beat the 41-cent average estimate of 21 analysts.

The cable fees helped counter a drop in advertising sales. Theme parks, Disney’s second-largest business, have struggled to attract tourists during the recession, while the film studio registered a second-straight loss. Chief Executive Officer Robert Iger today announced Chief Financial Officer Tom Staggs will swap jobs with parks head Jay Rasulo. Iger replaced his studio chief last month.

“As the numbers indicate, the studio had an extremely disappointing year in 2009,” Iger said on a conference call. “We see challenges to the film business model that must be addressed.”

Disney gained 56 cents to $29.61 in extended trading. The shares fell 24 cents to $29.05 at 4 p.m. in New York Stock Exchange composite trading and have gained 28 percent this year.

Sales gained 4.5 percent to $9.87 billion in the period ended Oct. 3, topping the $9.3 billion average estimate of 18 analysts. The quarterly profit increase was the first in a year. Results included a gain related to the merger of A&E Networks with the Lifetime channels. The latest quarter was one week longer than the year-earlier period.

Cable Revenue

The television division that includes ESPN reported a jump in fees from cable operators for sports programming. Last year, those were reported in the fiscal third quarter.

Revenue in media networks, which also include the Disney Channel and ABC, gained 14 percent to $4.73 billion. Profit increased 26 percent to $1.49 billion. The broadcasting division, including ABC and local stations, reported income of $2 million, compared with a loss of $71 million a year ago, on revenue of $1.39 billion. Ad prices are up 20 percent since May, Staggs said on the call.

ESPN’s affiliate fees rose $128 million from a year earlier, Staggs said.

Tourism

Theme-park results continued to decline as Disney offered bargains to bolster attendance and tourists continued to trim spending. Revenue in the division fell 4.2 percent to $2.84 billion, while profit tumbled 17 percent to $344 million.

Disney’s studios registered a loss of $13 million on lower than expected theatrical results, compared with a profit of $98 million a year ago. Revenue grew 3 percent to $1.5 billion. Releases during the quarter included the animated “G-Force” and “Surrogates.”

Last month, the company named Disney Channel President Rich Ross to lead the film studios, replacing 38-year company veteran Dick Cook. Yesterday, Ross announced a reorganization designed to reflect the changing ways consumers view movies and TV.

Shoppers aren’t building libraries of Blu-Ray titles in the same way they accumulated DVDs, Iger said on the call.

“This causes us to reconsider what we invest in films and how we market and distribute them,” Iger said. “These changes aren’t temporary.”

With the management changes announced today, Iger, 58, has installed new executives at the company’s second- and third- largest units, parks and studios, in the past month and given two top lieutenants an opportunity to burnish their credentials with new duties.

Changing Roles

Staggs, 49, has maintained the highest debt rating of major media companies. In 10 years as finance chief he oversaw Disney’s purchase of Capital Cities/ABC, Pixar and the pending deal to buy Marvel Entertainment Inc. He also helped steer the company through economic downturns in 2001 and 2008.

Rasulo, 53, oversaw the design and construction of California Adventure at the Disneyland resort in Anaheim, California, and the creation of Hong Kong Disneyland. He led the parks through the plunge in tourism after the terrorist attacks on Sept. 11, 2001, and through the current recession.

“This is something I wanted to do a year ago, but I waited until the economic climate stabilized,” Iger said in an interview. “I have a lot of confidence in both them. They are two very strong executives.”

To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

Last Updated: November 12, 2009 17:50 EST