Growth in media, films, parks lifts Disney 2Q profit 22 pct
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AP, Los Angeles: May 6 2008
Made Popular May 6 2008
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The Walt Disney Co. said Tuesday that a weak U.S. dollar kept domestic vacationers closer to home, boosting theme park revenue while growth in the company’s film studios and media networks also helped push second-quarter net profit 22 percent higher.

Disney said it earned $1.13 billion, or 58 cents per share, in the quarter ended March 29, compared with $931 million, or 44 cents per share, a year earlier.

Revenue for the period grew 10 percent to $8.71 billion.

Analysts expected earnings of 51 cents per share on $8.47 billion in revenue, according to Thomson Financial.

Disney shares jumped 87 cents, or 2.6 percent, to $34.60 in after-hours trading. The shares gained 44 cents to end the regular trading session at $33.73 before the earnings were announced.

Tourists from abroad also took advantage of the weak dollar, increasing park attendance and spending.

Resort revenue grew 11 percent to $2.73 billion, and hotel bookings at the resorts through 2008 were trending higher than last year, the company said.

“We’re definitely benefiting from the dollar weakness ... in two ways,” Chief Executive Robert Iger told analysts on a conference call.

A cheaper mix of hotel room offerings and bargains for extended stays also kept tourists coming, he said.

“While we don’t know where the marketplace will take us, we believe we’re much better positioned in a difficult economic cycle than we were in the past, certainly back in 1991,” Iger said.

Analysts had expected that the weak U.S. economy and reduced consumer spending might impede revenue at Disney theme parks.

“While we expect (parks revenues) to weaken, they continue to hold up better than expected,” said Richard Greenfield, an analyst with Pali Research.

The results for parks at home and abroad also benefited from an Easter holiday that fell in the second quarter, the company said.

Disney reported studio revenue increased 18 percent to $1.82 billion, with box office sales boosted by “National Treasure 2: Book of Secrets” and the 3-D hit “Hannah Montana/Miley Cyrus: Best of Both Worlds.”

Media networks revenue grew 5 percent to $3.61 billion, primarily due to growth at ESPN, Disney said.

The 100-day writers strike that ended in February cut the number of scripted shows on the ABC network, hurting ratings and ad revenue.

However, the gap was more than made up by sales of shows such as “Desperate Housewives” and “Lost” in international markets, Disney said.

The lack of network shows reduced ad inventory. That led to a 50 percent price increase in the spot ad market for the quarter, compared with ads sold before the season began, Iger said.

That bodes well for the upfront sales presentation to advertising agencies set for next Tuesday in New York, which will affect pricing for the coming fall TV season, he said.

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On the Net:

The Walt Disney Co.: http://www.disney.com

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