Disney's Fiscal 4th-Quarter Profit Nearly Triples, Surpassing Estimates
Wall Street Journal 9nov00

BURBANK, Calif. -- Walt Disney Co.'s fiscal fourth-quarter profit nearly tripled, buoyed by continued success at its broadcasting networks. The results easily topped analysts' expectations.

Disney said net income came to $240 million, or 11 cents a diluted share, for the period ended Sept. 30, compared with $85 million, or four cents a share, a year earlier. The results include the company's retained interest in Walt Disney Co. Internet Group. Analysts had expected earnings of about seven cents a share in the latest period, according to a survey by First Call/Thomson Financial.

The Internet Group interest hurt Disney's results to the tune of $177 million, including acquisition-related costs. Excluding the interest and related costs, the company said it would have reported earnings of $417 million, or 20 cents a share, Disney said.

Pro-forma operating income, excluding restructuring charges in the year-earlier period, soared 58% to $898 million.

Revenue increased 5.1% to $6.03 billion from $5.74 billion.

At its media networks, revenue rose 14% to $2.2 billion and operating income grew 26% to $460 million. Broadcasting revenue increased 12% to $1.28 billion as operating income soared 65% to $234 million, boosted by gains at the ABC television network and company's owned television stations due to a strong advertising market and the continued success of the television game show "Who Wants to Be a Millionaire."

Revenue at its cable networks jumped 16% to $911 million, while operating income inched up 2% to $226 million. Disney's share of operating income from cable-television activities, which consists of Disney's cable networks and cable equity investments, climbed 7% to $240 million.

At the company's parks and resorts unit, Disney said fourth-quarter revenue increased 10% to $1.7 billion, and operating income rose 10% to $362 million. Disney said results were driven by increased guest spending and record theme-park attendance at Walt Disney World, higher guest spending and attendance at Disneyland, and improved performance at the Disney Cruise Line, partially offset by increased costs at Walt Disney World and Disneyland.

The company's studio division reported a 2% revenue decline to $1.5 billion, while operating income swung to $87 million from a year-earlier loss of $84 million. Disney attributed the revenue drop to declines in world-wide home video and network-television production, partially offset by improvements in international theatrical motion-picture distribution.

Disney reported a 7% drop in fourth-quarter revenue to $628 million at its consumer-products division, while operating income rose 25% to $100 million.

Meanwhile, the Disney Internet Group, North Hollywood, Calif., reported a net loss of $249.5 million, or $1.61 a share, on revenue of $82.4 million. On a pro-forma basis, the company had a year-earlier loss of $281.6 million, or $1.84 a share, on $87.5 million in revenue.

Results in the latest quarter included amortization costs and a pretax gain of $152.9 million on the sale of Ultraseek, and impairment charges of $31.5 million, or 13 cents a share. Excluding $212.4 million in acquisition-related costs, the company said it would have reported a loss from continuing operations of $45.7 million, or 29 cents a share.

The Disney Internet Group, which completed an initial public offering in November 1999, is Disney's Internet and direct-marketing business.

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