Disney’s Third-Quarter Profit Rises 18%, Exceeds Forecasts

Walt Disney Co.’s fiscal third-quarter earnings rose a better-than-expected 18% as “101 Dalmatians” sold well worldwide and record crowds flocked to its theme parks.

Net income rose to $473 million, or 69 cents a share, from $401 million, or 58 cents, in the year-earlier period. The company’s earnings slightly exceeded Wall Street estimates of about 67 cents a share. Disney stock gained $2.44 on the news to close at $77.63 on the New York Stock Exchange.

Disney’s results improved nearly across the board, led by box-office and video sales of films as well as advertising sales at its television stations and the ESPN and Disney Channel cable networks. The one sore spot is the ABC-TV network, which has slid to No. 3 in viewership.

“Although there are very real concerns about the ABC network ratings, overall profitability more than makes up for those shortfalls,” PaineWebber analyst Chris Dixon said.

Revenue rose 2% to $5.2 billion from $5.09 billion. This is the fourth straight quarter that Burbank-based Disney has surpassed earnings estimates.

Disney’s earnings growth may not be as strong in upcoming quarters, said Lauren Allansmith, a vice president at Loomis, Sayles & Co., which owned 151,000 shares in March.

She said she expects live-action films, including “George of the Jungle” and “Con Air,” to turn in disappointing box-office totals. She also said that the problems at ABC will drag down profits from ESPN and that other cable channels and the theme parks will run into tougher comparisons with last year’s attendance.

Film studios reported the strongest gains in operating profit--rising 17% to $333 million--on the international box-office performance and U.S. video release of “101 Dalmatians” and the release of “Hercules.”

Revenue for the division fell 4% to $2.2 billion because it had fewer films in theaters. Still, the division had “a better mix of more profitable films” than it had a year earlier, said Hal Vogel, a Cowen & Co. analyst. The company also benefited from more titles on TV and growth in merchandising and licensing.

In its broadcasting operations, profit rose 7% to $337 million even with lower ratings at ABC, which is ranked behind NBC and CBS.

The broadcasting division reported gains in ad revenue and fees paid by affiliates of ESPN, increased subscribers for its Disney Channel, and an increase in ad revenue at its TV and radio stations. Broadcasting revenue rose 5% to $1.61 billion.

“Our cable operations, especially ESPN and the Disney Channel, also continue to be strong contributors,” Chairman Michael Eisner said in a statement.

Theme-park and resort revenue increased 10% to $1.37 billion as more people visited Walt Disney World in Florida and spent more money.