Parks fuel 12% gain in profit at Disney

If a weakening economy makes consumers tighten their belts, it hasn’t happened yet at Walt Disney Co.’s theme parks.

More visitors and more spending at Disney parks, along with a strong contribution from cable sports network ESPN, helped carry the Burbank-based entertainment conglomerate to a 12% profit increase in its fiscal fourth quarter, the company reported Thursday.

Disney logged net income of $877 million, or 44 cents a share, for the quarter that ended Sept. 29, compared with $782 million, or 36 cents a share, in the same period a year ago.

Quarterly revenue rose 3.2% to $8.93 billion from $8.65 billion a year ago.

“People are not giving up their family vacations,” Disney Chief Executive Robert A. Iger said in a conference call with analysts and reporters.

Disney shares gained 13 cents to $33.63 on a turbulent day in the stock market.

Operating income for Disney’s media networks division -- broadcast and cable television -- jumped 25% to $1.07 billion from $850 million a year earlier.

ESPN, buoyed in part by the addition of NASCAR auto racing, led the way. Subscriber growth and the settlement of a legal claim helped propel operating income growth at International Disney Channels.

Broadcasting lost $30 million on a 5% revenue decline, mainly because of a drop in U.S. syndication fees, as compared with last year’s fourth quarter, when the popular “According to Jim” and “Scrubs” were sold to syndication.

The parks and resorts segment saw a 9% rise in operating income, to $430 million from $396 million for the quarter. Higher attendance and higher guest spending at Disneyland Resort and Walt Disney World were a big part of the story, Disney said.

A weaker dollar attracted foreign visitors and helped keep Americans closer to home, the company said.

Studio entertainment was the weakest segment in the fourth quarter, showing a 21% decline in operating earnings, to $170 million from $214 million. Revenue sank 24%, to $1.53 billion from $2 billion. This year’s results suffered by comparison with a gangbusters box-office performance a year earlier, when Disney released the hit movie “Pirates of the Caribbean: Dead Man’s Chest.”

Analyst Anthony Noto of Goldman Sachs said in a note to clients that Disney continued to show “broad-based growth in an otherwise tepid domestic consumer environment.”

Noting that Disney had recorded six straight quarters of double-digit increases in operating income, Noto said he expected another year of “solid growth” in 2008.

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