Disney profit drops
Reuters - 10/17/05

Disney profit drops
Thursday November 17, 8:34 pm ET
By Gina Keating

LOS ANGELES (Reuters) - Walt Disney Co (NYSE:DIS - News) on Thursday reported a 27 percent drop in fourth-quarter profit, weighed down by weak U.S. performances from movies including "Proof" and "Dark Water," and soft DVD sales.

Disney's media networks division, which includes cable sports channel ESPN and broadcaster ABC, posted a jump in earnings. Its parks and resorts business also showed improvement.

Shares fell more than 2 percent in light trade after the company posted a drop in net income to $379 million or 19 cents per share, including the effect of stock options expensing, in the fiscal fourth quarter ended October 1, from $516 million or 25 cents per share a year ago.

Revenues rose to $7.734 billion from $7.543 billion a year earlier.

Excluding stock based compensation charges and the net effect of income tax benefits and other items, Disney posted a profit of 20 cents per share, topping the Wall Street consensus by 2 cents, according to Reuters Estimates.

But revenue missed the consensus estimate of $7.8 billion.
"Overall, I'm pleased with what they did on the bottom line," Sanders Morris Harris analyst David Miller said. But he said he would have preferred to see Disney surpass earnings expectations through growth of its underlying businesses rather than one-time items. That factor could be depressing shares in after-hours trade, he added.

Disney's movie studio posted an operating loss of $313 million in the quarter, versus a profit of $23 million a year earlier, weighed down by poor performances by its Miramax unit and slow DVD sales.
Media networks, which includes ABC television and ESPN, saw a 41 percent rise in profit to $632 million, Parks and Resorts profit rose 10 percent to $309 million, while the consumer products division profit fell 10 percent to $132 million.
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