DUCKY QUARTER FOR DISNEY CABLE, THEME PARK BUMP COMES IN HANDY.

Byline: Greg Hernandez Staff Writer

BURBANK - The Walt Disney Co. beat Wall Street estimates Tuesday with third-quarter profits that were up 20 percent from a year ago. Strong performances of Disney's cable networks and theme parks offset a string of costly movie bombs, including ``The Alamo'' and the continued ratings struggles of ABC.

Disney's net profit was up to $604 million, or 29 cents per share, compared to $502 million, or 24 cents per share, during the third quarter a year ago. Revenue rose to $7.5 billion from $6.4 billion.

``The continued growth in our earnings this quarter, led by ESPN and our other cable networks, positions us well to deliver more than 50 percent growth in earnings for the year, as we predicted last quarter,'' said Disney CEO Michael Eisner.

Analysts had predicted earnings of about 27 cents per share.

``They seem to be making progress, but theme parks are a little bit lower than I thought they'd be,'' said media analyst Dennis B. McAlpine. ``The cable networks obviously were a big driver and will continue to be that.''

Disney's media networks, which include ABC, ESPN and the Disney cable channels, saw operating profit increase 15 percent to $673 million and revenues go up by 8 percent to $2.9 billion.

``ESPN continues to be a leading innovator in the cable world,'' said Disney President and Chief Operating Officer Bob Iger, adding that the cable network had its 10th consecutive quarter of ratings growth.

Iger, saying that formation of ABC's struggling prime time schedule remains the ``key focus,'' expressed optimism over the fall slate, the first under new network management.

``We expect to see meaningful improvement,'' Iger said. ``We are hopeful and expectant that our current management team at ABC will take us back to No. 1 or at least No. 2.''

Attendance at Florida's Walt Disney World was up by a solid 20 percent, while Disneyland in Anaheim experienced only a 1 percent increase in attendance. Executives suggested that the stream of terrorism warnings from the federal government ``must have some impact on the psyche of the consumer.''

Overall parks and resorts revenues for the quarter increased by 32 percent to $2.3 billion, and operating income climbed 20 percent to $421 million.

Eisner explained that, from the end of 1997 through the last quarter, the company had invested $11 billion in capital expenditures, largely at theme parks and resorts. He said this long-term commitment will leave shareholders better off.

``The recovery in attendance in our parks is clearly helped by the expansion we took,'' he said.

A solid theme park performance and media networks improvement came at a time when Disney's movie division suffered through another dismal quarter, with the failures of ``The Alamo,'' ``Around the World in 80 Days'' and ``Raising Helen.''

The movie division, which had a record year in 2003, saw its operating income decrease to $28 million compared to $71 million in the prior year's third quarter, when ``Finding Nemo'' was dominating at the box office.

Eisner acknowledged ``a bit of a cold streak'' in the movie division but said he had strong expectations for such upcoming Disney releases as ``The Princess Diaries 2: Royal Engagement,'' ``Ladder 49'' and Pixar Animated Studio's ``The Incredibles.''

``We have a strong slate going forward on paper,'' Eisner said. ``You have hot spells, and you have cold spells.''

But fourth-quarter release ``King Arthur'' was a big-budget bomb, and, although Eisner expressed satisfaction with the performance of ``The Village,'' the suspense thriller saw ticket sales plummet by 67 percent last weekend after a strong opening.

``Where you may see this really hit is on video,'' McAlpine said. ```Finding Nemo' and 'Pirates of the Caribbean' were very big, and you aren't going to have that same video (revenue) later this year.''

But, for the third quarter, home video was strong, with DVD sales up by 40 percent from a year ago, fueled by such titles as ``Kill Bill Vol. 1,'' ``Bad Santa'' and ``Miracle.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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Photo:

Michael Eisner, Disney CEO, attends Monday's Walk of Fame ceremony for Donald Duck. Disney skirted movie and TV failures with profits from theme parks and cable networks.

Nick Ut/Associated Press