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Disney Profit Pushes Stock to Record High

January 28, 1998|From Times Staff and Wire Reports

Walt Disney Co. shares soared to a record high Tuesday as the entertainment giant's fiscal first-quarter profit rose a better-than-expected 18% on record business at its Florida theme parks and strong results from ESPN and other cable TV networks.

Net income increased to $755 million, or $1.10 a diluted share in the quarter ended Dec. 31, from $641 million, or 93 cents, a year earlier, adjusted for the sale of some newspapers and a TV station.

The news sent Disney's shares rocketing $5.38 to a record $102.75 on the New York Stock Exchange. Disney's gain accounted for about one-quarter of the 102.14-point rise in the Dow Jones industrial average.

Disney stock traded at about $80 in late October.

The company's profit was boosted by the strong U.S. economy, which gave consumers more money to spend on theme parks and Disney Store merchandise, and boosted advertising at Disney's TV stations and cable channels.

Revenue rose 5.9% to $6.34 billion in the quarter from $5.98 billion a year ago, as theme parks and cable overcame moderate growth in films and the ABC broadcast network.

Operating profit from resorts and theme parks, including Disneyland in Anaheim, rose 21% to $287 million on record attendance and higher room rates.

Creative content, the biggest division, showed a 4.7% gain in profit, to $700 million, on films such as "Flubber" and "Scream 2." Though the movies were profitable, they didn't match the 1997 blockbusters "Ransom" and "101 Dalmatians."

Broadcasting profit rose 7.6% to $505 million. That's largely a testament to sports network ESPN, one of the most profitable cable channels, because ABC remains mired in third place behind General Electric Co.'s NBC and CBS Inc.

ESPN's profit increased on higher advertising and affiliate fees, which also helped the company's Disney Channel, which features mostly children's programming.

In terms of sales, Disney is the No. 2 U.S. media company, after Time Warner Inc.

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