The Tide’s Turned for Disney Unit : Movies: In the last six months Hollywood Pictures, the once-shaky studio, has scored with three hits earning more than $250 million domestically.

A year ago, Hollywood Pictures was a studio on decidedly shaky ground.

Ricardo Mestres, who had headed the Walt Disney Co. unit for six years, stepped down amid widespread criticism that the studio’s formula for success--a steady diet of high-concept, low-budget films--was growing stale.

The formula had produced huge profits for Disney with movies like “The Hand That Rocks the Cradle” and “Encino Man.” But Hollywood Pictures also churned out a steady stream of mindless flops from “Swing Kids” to “Super Mario Bros.”

With the subsequent departure of Mestres’ boss, Disney Studios Chairman Jeffrey Katzenberg, who left after being denied a corporate promotion by Disney CEO Michael Eisner, the film industry was abuzz with rumors that Hollywood Pictures might be history.

Flash-forward to 1995, however, and the adage that everything in the movie business is cyclical is never more true than at Disney.

If there were awards for Comeback of the Year in studios, Hollywood Pictures might currently qualify. In the space of six months, the label can be credited for three hits that have brought in more than $250 million domestically.

* Comedian Tim Allen’s holiday comedy, “The Santa Clause,” was released under the Walt Disney label but was developed at Hollywood Pictures. It raked in $144.8 million domestically, and studio officials say it could top $250 million after playing overseas.

* The romantic comedy “While You Were Sleeping,” starring Sandra Bullock, has grossed more than $58 million domestically this spring. The film cost only $16 million to make and Disney expects it to go over $175 million in worldwide ticket sales, which would make it one of Disney’s most profitable live-action films.

* The submarine thriller “Crimson Tide,” starring Denzel Washington and Gene Hackman, is perhaps the biggest action movie ever made at Disney. It is making waves at the box office with nearly $54 million in three weeks of release.

Today, in fact, Mestres might wish he had only been given another year to see these films, which were in the pipeline while he still ran Hollywood Pictures, come roaring to life on the big screen.

“The whole thing is a festival of irony,” Mestres said, “but I am gratified that Hollywood Pictures is finally coming into its own, even if I have to enjoy it vicariously.” Mestres is now a producer on the lot.

But the resurgence of Hollywood Pictures, industry observers say, also owes much to the marketing philosophy of Joe Roth, who assumed command after Katzenberg’s departure, as well as Michael Lynton, who succeeded Mestres, coming to the studio from Disney’s book-publishing arm, Hyperion.

In reality, Hollywood Pictures still has had its share of flops, but audiences may not have noticed. That’s because Roth has aggressively marketed those films that triggered positive public responses in preview screenings and quickly jettisoned those that didn’t.

Remember “Funny Bones”? It sank faster than a stone after its March release. The film, which starred Oliver Platt as a comedian desperate to succeed in the shadow of his funnyman father (Jerry Lewis), grossed only $374,000.

One recent film that Disney executives did hype, but to no avail, was “Miami Rhapsody,” a Woody Allen-esque comedy starring Sarah Jessica Parker. It took in only $5.2 million at the box office.

But with “While You Were Sleeping,” which Roth co-produced with Roger Birnbaum at Caravan Pictures, and “Crimson Tide,” which Hollywood Pictures gave to Don Simpson and Jerry Bruckheimer to produce, Roth moved up their release dates after good audience test responses.

“In the case of ‘Crimson Tide’ and ‘While You Were Sleeping,’ they both only had one preview screening,” Roth said. “Both went so well that we moved them up [in release] much earlier than summer.”

Had he waited for midsummer, Roth said, “Crimson Tide” would have had to come after such high-powered action films such as “Batman Forever,” “Congo,” “Judge Dredd,” “Under Siege II” and “Waterworld.”

By that time, he said, “the audience may be sated with action pictures, so we just felt the picture played so well we wanted to get out in front. Of course, the risk is that a picture released then [May 12] may not play well through the belly of the summer.”

Roth said that Disney had given serious thought to shutting down Hollywood Pictures last year but that now, under Lynton and his staff, he believes the banner is in a strong position.

This summer, Hollywood Pictures will release Sylvester Stallone’s “Judge Dredd,” followed by Michelle Pfeiffer in “Dangerous Minds.” In the fall, Demi Moore will star in “The Scarlet Letter.”

One big-budget action film in the works is “The Rock,” about a group of terrorists who take over Alcatraz and point nerve gas at San Francisco. It will be produced by the Simpson-Bruckheimer team.

Also planned are “Eddie,” starring Whoopi Goldberg as a fan who is drafted to coach the New York Knicks; “Jack,” a comedy directed by Francis Ford Coppola starring Robin Williams as a 10-year-old boy in a 40-year-old man’s body; and Madonna in the musical “Evita.” Meanwhile, Oliver Stone’s “Nixon” and Ridley Scott’s “White Squall” are under way, and Hollywood Pictures has acquired a novel called “The Horse Whisperer” for nearly $3 million for Robert Redford to develop.

Lynton said Hollywood Pictures will still make its share of low-budget comedies that, when they work, can trigger enormous profits.

“But what we are trying to do now is develop ‘best-of-type’ movies in action, drama, comedy and romantic comedy,” Lynton said. “We are, by no stretch, trying to turn out cookie-cutter movies.”

Lynton also said his staff--executive vice president Charles Hirschhorn and senior vice presidents Lauren Lloyd and Mike Stenson--should be credited for the studio’s recent success.

Ironically, while Hollywood Pictures was hitting the skids last year, its sister label, Touchstone Pictures, was still flying high, having found box-office success in Whoopi Goldberg’s 1992 rollicking nun comedy “Sister Act,” and its 1993 sequel, “Sister Act 2.”

Like all of Disney, Touchstone was rocked by Katzenberg’s departure and there were many question marks about Roth.

David Hoberman, who had been promoted to oversee all movie production just before Katzenberg quit, recently left his post under Roth to become a producer. Hoberman conceded that Touchstone now is the studio with something to prove.

But like Mestres and Hollywood Pictures, Hoberman is optimistic about future Touchstone releases such as “Father of the Bride 2” with Steve Martin, “Up Close and Personal” with Robert Redford and Michelle Pfeiffer and “Mr. Wrong” with Ellen DeGeneres.