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Disney 3Q beats Street on ESPN, theme parks growth

By Ryan Nakashima

Associated Press

Published: Tuesday, Aug. 9 2011 3:51 p.m. MDT

LOS ANGELES — The Walt Disney Co. said Tuesday that its net income in the latest quarter rose 11 percent as growth at ESPN, its theme parks and consumer products businesses outweighed lackluster performance at its movie studio and interactive unit.

Net income in the fiscal third quarter, which ended July 2, grew to $1.48 billion, or 77 cents per share. That's up from $1.33 billion, or 67 cents per share, a year ago.

Excluding special charges, including those related to layoffs at its movie studio, adjusted earnings came to 78 cents per share, beating the 73 cents expected by analysts polled by FactSet.

Revenue grew 7 percent to $10.7 billion, also topping the $10.4 billion expected by analysts.

Its stock rose 66 cents, or 1.9 percent, to $35.36 in after-hours trading after the results were announced. That added to the gain of $1.67, or 5.1 percent, in the regular session.

Advertising revenue was flat at ESPN as higher ad rates made up for the lack of the FIFA World Cup and Game 7 of the NBA finals this year. Revenue at cable TV channels including ESPN rose 7 percent to $3.52 billion.

Broadcasting revenue fell 1 percent to $1.43 billion as ad revenue on its ABC network grew, but local ad sales at TV stations fell because of lower political advertising.

Combined, Disney's TV businesses saw operating profits grow 11 percent to $2.09 billion, again proving to be the biggest and most reliable source of earnings for the company.

Parks and resorts revenue rose 12 percent to $3.17 billion thanks to higher guest spending and attendance at its domestic parks and resorts and a full quarter of operations for its newest cruise ship, Disney Dream. The earthquake and tsunami in Japan hurt its Tokyo theme parks.

Studio revenue fell 1 percent to $1.62 billion as the combined blockbuster power of "Cars 2," ''Thor," and "Pirates of the Caribbean: On Stranger Tides" could not top last year's "Toy Story 3," ''Iron Man 2," ''Alice in Wonderland," and "Prince of Persia." Higher costs on "Pirates" cut into studio profits, which fell 60 percent to $49 million.

Consumer products revenue grew 13 percent to $685 million. Interactive media revenue grew but losses got bigger even after its purchase of social game maker, Playdom, last year.

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