Disney Profit Tops Estimates on TV Gains, Theme Parks (Update2)

Feb. 9 (Bloomberg) -- Walt Disney Co., the world’s biggest media company, reported fiscal first-quarter profit that beat analysts’ estimates as TV revenue rose and theme-park results stabilized.

Net income totaled $844 million, or 44 cents a share, compared with $845 million, or 45 cents, a year earlier, when a gain on the sale of TV stations boosted results, Burbank, California-based Disney said today in a statement.

Theme-park revenue was flat, a sign discounts have helped Disney weather cuts in tourism. Consumers continue to spend less to visit the parks and buy less food and merchandise once they arrive, the company said. The cable unit, led by the ESPN sports network, posted increased sales and profit on higher affiliate fees and ad revenue.

“Several areas were much stronger than expected,” David Joyce, an analyst at Miller Tabak & Co., said in an interview. “The parks and resorts, media networks and the studio all topped the street’s estimates.”

Disney rose 16 cents to $30 in extended trading. The shares added 36 cents to $29.84 at 4 p.m. in New York Stock Exchange composite trading and gained 42 percent in 2009.

Excluding one-time items, earnings of 47 cents a share beat the 38-cent average of 18 analysts’ estimates compiled by Bloomberg. Sales rose 1.5 percent to $9.74 billion in the quarter ended Jan. 2, exceeding the $9.63 billion average estimate of 17 analysts surveyed by Bloomberg.

iPad Products

Iger said ABC, ESPN and Marvel are creating applications, or apps, for Apple Inc.’s iPad, a tablet computer announced on Jan. 27. Apple CEO Steve Jobs is Disney’s biggest shareholder.

“We find that the iPad has a lot of potential,” Iger said. “We think it’s a really compelling device. We think it could be a game-changer in terms of enabling us to create essentially new forms of content.”

Disney’s revenue from digital operations exceeded $2 billion in fiscal 2009, Iger said.

Disney’s cable operation, including ESPN, Disney Channel and ABC Family, reported a 5.2 percent gain in profit to $544 million as revenue increased 8.2 percent to $2.65 billion.

Broadcasting profit, including the ABC network and local stations, increased 30 percent to $180 million from a year earlier, which included a bad debt charge. Revenue rose 4.8 percent to $1.52 billion.

Chief Financial Officer Jay Rasulo said on a conference call that broadcast ad prices are up 30 percent from contracted rates booked in May.

Theme Parks

Theme-park revenue totaled $2.66 billion while profit fell 1.8 percent to $375 million from $382 million. Disney is continuing to offer discounts of several hundred dollars to attract park visitors, Joyce said.

Resort bookings this quarter are running about 10 percent below a year earlier, Rasulo said on the call.

Profit from consumer products declined 8.3 percent to $243 million as sales shrank 3.5 percent. On Feb. 4, Disney said it acquired the operator of its namesake stores in Japan. It also recently purchased chains in North America and Europe.

Profit at the Disney studio increased 30 percent to $243 million as revenue was little changed. The company credited lower costs in its domestic DVD business.

Releases including “Alice in Wonderland,” “Iron Man 2,” “Prince of Persia” and “Toy Story 3” will help drive results at the studio this fiscal year, Anthony DiClemente, a Barclays Capital analyst, said yesterday in a report.

On Jan. 4, Disney completed its acquisition of Marvel Entertainment, the comic book publisher and film studio, giving the company ownership of characters including “Iron Man.”

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