Disney Earnings Rise 19 Percent

BURBANK (AP) – Strong television ratings and increased theme park attendance helped profit at The Walt Disney Co. rise 12 percent in the second quarter, although the media conglomerate did report a drop in earnings at its film studio. The Burbank-based company on Tuesday reported net income of $733 mil-lion, or 37 cents per share, for the three months that ended April 1, compared with income of $657 million, or 31 cents per share, in the same period last year. Revenue grew to $8 billion from $7.8 billion in the same period last year. The results beat estimates of analysts surveyed by Thomson Financial who had been expecting earnings of 31 cents per share.

• Operating income fell 39 percent at Disney's film studio while revenue decreased 22 percent to $1.8 billion. This year's DVD releases have not sold as well as the DVD of the Pixar Animation Studios hit "The Incredibles" in the same period last year. Studio performance should pick up in the second half of the year with the release of the latest Pixar film, "Cars" next month and the sequel to "Pirates of the Caribbean" in July, the company said.
• Home video revenue from the DVD release of "Chronicles of Narnia: The Lion, The Witch and The Wardrobe" will also be seen in the third quarter.
• The company's media networks division, which includes ABC and cable channels such as ESPN, delivered the best performance with a 20 percent jump in operating income and an 18 percent rise in revenue to $3.6 billion. Results were helped by higher subscriber fees at ESPN and rising advertising revenue at ABC, which continues its ratings comeback. That trend should continue as the network gets ready to negotiate new deals with advertisers for the fall schedule. ABC will present its lineup next week and expects strong increases in ad rates over last year, the company said.
• Attendance at Disneyland in California grew 15 percent in the quarter as the theme park's 50th anni-versary celebration winds down. Attendance at Walt Disney World in Florida rose a more modest 3 percent, Disney said. The company said it does not expect rising gas prices to lower attendance at its domestic parks. Attendance at Disney's latest park in Hong Kong has been lower than anticipated, but company executives said they still expect to hit their one-year goal of 5.6 million visitors.

Looking ahead, Staggs said the acquisition of Pixar Animation Studios Inc., which closed last week, will reduce earnings per share for the year by 10 cents, spread evenly over the next two quarters. Disney is-sued new shares to pay for the purchase. Iger confirmed that work on a sequel to Pixar's "Toy Story" franchise has begun, although no release date has been set. Iger also said he was pleased with the re-sponse to the free, advertising-supported streaming of TV shows on ABC.com. He said that option, which is in addition to the sale of ABC shows on Apple Computer Inc.'s iTunes store, will continue past the original trial date of June 30. Disney may also join Warner Bros. in distributing its shows via a peer-to-peer computer network, Iger said. For the six months that ended April 1, Disney reported net income of $1.5 billion, or 74 cents per share, compared with $1.3 billion in the same period last year. Revenue in-creased to $16.9 billion from $16.5 billion in the first six months of 2005.