Disney Gains After Analysts Say Adjusted Profit Beat Estimates

Walt Disney Co., the world’s biggest media company, rose the most in six months after analysts said fourth-quarter profit topped estimates.

Excluding restructuring and impairment costs of $216 million, profit amounted to 50 cents a share, according to Michael Nathanson, an analyst at Nomura Securities International Inc. in New York. That beat the 47-cent average of 25 analysts’ estimates compiled by Bloomberg.

Disney gained $1.82, or 5.1 percent, to $37.75 at 4 p.m. in New York Stock Exchange composite trading, the biggest advance since May. Disney Chief Financial Officer Jay Rasulo fully disclosed restructuring, programming and film studio writedowns during the company’s conference call after U.S. markets closed yesterday.

“Upon scanning the press release, the results seemed weak,” Nathanson wrote in a note today. “However, it turns out that you can’t judge a quarter by a press release.”

Yesterday the stock fell $1.06, or 2.9 percent, to $35.93 after the report was released early, before U.S. markets closed. The company said it is investigating how the information became available.

Net income fell 6.7 percent to $835 million, or 43 cents a share, from $895 million, or 47 cents, a year earlier, Burbank, California-based Disney said yesterday. Sales slid 1.3 percent to $9.74 billion in the period ended Oct. 2, missing the $10 billion average of 20 analysts’ estimates compiled by Bloomberg.

Disney had a $100 million writedown of film inventory, a $58 million charge for programming writeoffs at its Lifetime network, and restructuring and impairment charges of $58 million, Rasulo said on the call.

Anthony DiClemente, an analyst with Barclays Capital in New York, also told clients in a note today that adjusted earnings amounted to 50 cents a share excluding the above items. Disney reported adjusted per-share earnings of 45 cents.

DiClemente and Nathanson recommend buying the stock.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net; Andy Fixmer in Palm Springs, California, at afixmer@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net

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