Walt Disney Net Profit Rises 8% in First Quarter

Walt Disney Productions reported net income of $34.7 million for its first quarter ended Dec. 31, 1985, up 8% from the same period a year earlier. The Burbank-based entertainment company said its revenue rose 18% to $426.5 million.

General and administrative expenses for the company rose 41% for the three-month period compared to the previous year, while among the company’s four divisions, costs and expenses rose most sharply for the filmed entertainment unit, up 63% to $102.8 million from $62.9 million a year ago.

Through an aide, Disney Chairman and Chief Executive Michael D. Eisner declined to comment on the reasons for the sharply increased costs.

However, Eisner’s recruitment 16 months ago stemmed largely from the Disney board’s hope that the former Paramount Pictures president could increase Disney’s motion picture and television production and distribution to levels equivalent to Hollywood’s largest and most profitable studios.

With the exception of the Arvida real estate development unit, each of the other divisions showed gains in operating income. The theme parks division rose 66% to $43.9 million, filmed entertainment rose 49% to $22.9 million and consumer products rose 17% to $19.5 million in income before corporate expenses.

The Florida-based Arvida unit reported income of $10.3 million for the quarter, down 64%. In a prepared statement, Disney executives noted that the year-earlier results benefited from certain land and property sales.

Disney said the overall increase in revenue and net income could be attributed to strong results at its theme parks in California and Florida, as well as an improved performance by the filmed entertainment unit.

Results for the latter unit were boosted by the Christmas re-release of an animated classic film, “101 Dalmatians,” as well as foreign syndication license agreements, higher home-video revenue and improved operating results for its pay-television channel, the company said.

In a separate development, an investor group led by the Bass family of Fort Worth told the Securities and Exchange Commission that seven members of its group have used 367,234 of their Disney shares to cover a previously disclosed short position in the stock.

(A short position is created when an investor borrows shares and sells them, anticipating that the stock price may soon fall and a profit can be made by replacing the borrowed shares when the price is lower.)

Of those who delivered shares in the transaction, none is a member of the Bass family itself, according to the filing. The group’s remaining stake in Disney is about 22.1%, according to documents filed Thursday.