Disney Reports 33% Higher Net on Soaring Product Sales, Films

Walt Disney Co., boosted by successful movies that were cheap to make and by soaring sales of film-character merchandise, said Thursday that its quarterly net income rose 33%.

But the Burbank-based company also cautioned investors not to expect quick profitability from Euro Disney, its new, 5,000-acre complex of six hotels and an amusement park outside Paris.

Disney reported net income of $220.7 million, or 41 cents a share, for its April-June third quarter. Revenue rose to $1.85 billion, a 23% increase from the corresponding quarter a year ago.

Lisbeth R. Barron, a securities analyst at S. G. Warburg & Co. in New York, said the earnings show the wisdom of Disney’s return to making relatively inexpensive films targeted at core audiences. Disney’s film division revenue rose 23% over the corresponding 1991 quarter, to $723.8 million.

“The company is doing a better job than probably any other studio right now in maximizing their profit on films,” Barron said, citing the recent box office receipts for two such Disney films, “Encino Man,” and “Sister Act.”

Based on merchandise sales, Disney’s consumer products revenue rose 54%, to $239 million, while operating income was up 31%, at $61 million.

The company’s stock dropped 25 cents on Thursday, closing at $35.50 a share in New York Stock Exchange trading.

Although Disney reported that its theme park and resort division’s revenue climbed 17%, the company said the unit’s overall results “were negatively impacted” by the investment in Euro Disney. Disney said attendance has been strong since the park opened in April--but cautioned that “no inference as to future attendance or profitability of Euro Disney should be drawn.”

Barron said that her firm has learned that theme park attendance was up 2% for the quarter at Disneyland in Anaheim, and up 8% at Walt Disney World in Orlando, Fla.