DISNEY PROFIT UP 5% IN FIRST FISCAL QUARTER.

Byline: Evan Pondel Staff Writer

The Walt Disney Co. said Monday its fiscal first-quarter profit rose 5 percent, bolstered in part by a stellar performance in broadcast and cable television revenue.

The Burbank-based company reported net income of $723 million, or 35 cents a share, compared with net income of $688 million, or 33 cents a share, in the same period a year ago. Disney attributed most of its strength to a resurgence in ratings at ABC and ESPN, helping the entertainment behemoth increase advertising revenue.

Revenue from media networks grew 11 percent to $3.5 billion, while segment operating income rose 36 percent to $487 million.

Disney executives touted the company's performance, especially after ``fiscal 2004 was anything but routine,'' Thomas Stagg, chief financial officer, said at an investors conference Monday evening in Orlando, Fla. Looking ahead, ``we expect to deliver strong growth this year and strong growth over the long term.''

The company's primary focus for 2005 is Disneyland's 50th anniversary, along with the opening of Hong Kong Disneyland and the DVD release of ``The Incredibles'' - an animated film that dominated the holiday season with box office grosses nearing $250 million.

Michael Kamins, associate professor of marketing at the University of Southern California, said Disney needs to maintain its most important commodity in 2005: the characters and story lines that enhance the company's value on myriad levels.

``It's their everlasting gold mine that will help them get through a business environment that I don't see getting better,'' he said. ``Up against companies like DreamWorks, Disney will have to be creative to win at the game of animation, and perhaps even movies.''

Disney is also looking to weakness in the U.S. dollar and an increase in tourism as potential boons to business. Revenues from parks and resorts increased 30 percent to $2.1 billion in the first quarter, versus $1.6 million in the year-ago period.

Studio entertainment revenue decreased 20 percent to $2.4 billion when compared with the 2003 period. Disney said sluggish sales of DVDs including ``Finding Nemo,'' ``Pirates of the Caribbean'' and ``The Lion King'' platinum release offset strong performances a year ago.

Consumer products also took a drubbing, with first-quarter revenues down 14 percent to $725 million. Disney said the decline was primarily due to the absence of holiday season revenues from the Disney Store, which was sold in October to The Children's Place Retail Stores Inc.

In other business moves, analysts at the investor conference on Monday questioned whether Disney, one-time owners of Major League Baseball's Angels, had intentions to lure a professional football team to Anaheim. ``Obviously we support Anaheim. But we are moving away from professional sports,'' Stagg said. ``Our biggest interest in the NFL is in the programmers.''

For the near term, Disney expects double-digit earnings growth this year. Stagg also said the company plans to stoke its stock repurchasing program. ``We were blacked out (in 2004),'' he said. ``And going forward, we will likely be back in the market.''

Disney shares added 40 cents to close at $28.63 Monday on the New York Stock Exchange.

Evan Pondel, [phone]

evan.pondel(at)dailynews.com