DISNEY PROFITS STRONG FOR Q4 TV, THEME PARKS OUTPACE MOVIES.

Byline: Greg Hernandez Staff Writer

BURBANK - The Walt Disney Co. made up for a dismal quarter at its film studio with gains in its television, theme park and consumer divisions and a tax benefit that resulted in fourth-quarter profits climbing 24 percent, the company reported Thursday.

Disney CEO Michael D. Eisner, who earlier in the day had continued his testimony in a shareholder lawsuit in Georgetown, Del., sounded somewhat hoarse as he summed up the company's performance.

``We've had a bright year at Walt Disney Co.,'' Eisner said. ``We believe we have positioned this company for a bright future as well.''

Disney reported net income of $516 million, or 25 cents a share, for the fiscal quarter ended Sept. 30. This was up from $415 million or 20 cents per share from 12 months earlier. Fourth-quarter revenues rose to $7.54 billion compared to $7.01 billion in 2003.

The results included a 6-cent per share gain related to taxes, compared to a similar 3-cent per share benefit a year earlier.

For the fiscal year, Disney revenues were $30.75 billion, up 14 percent from $27 billion the year before.

Results from Disney's Studio Entertainment Division were the lowlight for the company, especially after such a stellar fourth quarter in fiscal 2003 that was powered by the box office and DVD performances of blockbusters ``Finding Nemo'' and ``The Pirates of the Caribbean: Curse of the Black Pearl.''

Operating income for Disney's Studio Entertainment division tumbled dramatically to $23 million during the fourth quarter from $205 million in 2003 while revenue decreased 14 percent to $1.9 billion.

``The film business is very hit or miss,'' Peter Jankovskis, research director at Oakbrook Investments LLC. in Illinois told Bloomberg.

In the fourth quarter, Disney's comedy ``Mr. 3000'' bombed at the box office while the John Travolta film ``Ladder 49'' has been a modest success with a gross of $72.3 million to date.

In fiscal 2004, no such hits materialized with only ``The Village'' crossing the $100 million mark domestically and ``Princess Diaries 2: The Royal Engagement'' coming close at $94 million. Major bombs included such big-budgeted fare as ``The Alamo,'' ``King Arthur,'' ``Hidalgo,'' the animated ``Home on the Range'' and the epic ``Around the World in 80 Days'' which Disney acquired and distributed.

For the year, studio revenue was up 18 percent to $8.7 billion with operating income up 7 percent to $662 million.

In contrast to the woes of fiscal 2004, Disney currently is distributing the No. 1 film in the marketplace with Pixar Animation Studio's ``The Incredibles.'' In just two weeks, the film has grossed $149.2 million, but that success will not be reflected in earnings until the first quarter of fiscal 2005.

``As we look ahead to 2005 at the studio, we are already off to a strong start with `The Incredibles,'' which will be out on home video later in the (fiscal) year ... and are optimistic about this weekend's opening of 'National Treasure,''' said Disney Chief Financial Officer Thomas Staggs.

Disney's Media Networks Division, which includes the ABC television network and cable channels ESPN and ABC Family benefited from higher ad revenue and lower programming costs as it saw revenue increase by 10 percent to $2.9 billion and operating income jump by 50 percent to $448 million.

Overall, television revenues for 2004 increased 8 percent, to $11.9 billion with operating income up 79 percent to $2.2 billion.

Disney has spectacular-performing new fall dramas ``Desperate Housewives'' and ``Lost'' and the second-season smash reality show ``Extreme Makeover: Home Edition'' on its schedule and the new hit reality show ``Wife Swap.''

``We're off to a strong creative start in prime time with four hit shows,'' Disney President and Chief Operating Officer Bob Iger told analysts. ``With continued results in our ratings, we will be in strong position. The network has quickly become the place to be for the creative community.''

Disney's Parks and Resorts Division saw its revenue for the year improve by 21 percent to $7.8 billion with operating income up 17 percent to $1.1 billion. Parks and Resorts fourth-quarter revenue was up 31 percent to $2.2 billion, while segment operating income rose by 25 percent to $282 million.

In Florida, hurricanes resulted in a slight decrease in attendance for the quarter with Walt Disney World Resort completely closed for three days and another five days with limited hours of operation.

Meanwhile, revenues also grew in the fourth quarter and full year for Disney's Consumer Products Division. Revenues for the year increased by 7 percent, to $2.5 billion, while segment operating income grew by 39 percent, to $534 million. For the quarter, revenues increased by 10 percent, to $618 million, with segment operating income up 43 percent, to $146 million.

Disney shares fell to $26.37 per share Thursday on the New York Stock Exchange, slipping 19 cents or less than 1 percent. In after-hours trading, shares rose by 2 percent to $26.90.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com