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Disney 3Q beats Street
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August 3, 2000: 7:27 p.m. ET
Strength at media networks, parks units, drive profits, revenue higher
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NEW YORK (CNNfn) - Entertainment conglomerate Walt Disney Co. boosted third-quarter profit to $633 million, exceeding analysts' estimates thanks to strength at its television and theme park operations, the company said on Thursday.
Burbank, Calif.-based Disney, home to Mickey Mouse, Disneyland and "Who Wants to Be a Millionaire," reported net income, excluding its stake in the Go.com Internet unit, of 30 cents a share, up from $427 million, or 20 cents a share a year ago. Analysts had expected a profit of about 24 cents a share.
 Factoring in the retained interest in Go.com, whose name has been changed to Disney Internet Group, Disney's net income increased 79 percent to $440 million, or 21 cents a share. First Call, which tracks the company's performance including Go.com, had anticipated a profit of 14 cents a share.
So with or without Go.com, Disney profits easily beat expectations.
"The quarter was terrific," said David Londoner, media analyst at ABN AMRO. "The operating income was $60 million better than we thought and that basically showed up in the media networks, basically in ABC," he added, noting that the film studio's loss was not as wide as he had anticipated.
Leading the company's strength in the quarter was its Media Networks group, and its rating powerhouse, "Who Wants to Be a Millionaire." The unit posted revenue of $2.3 billion, up 20 percent from the same period one year ago, and operating income of $662 million, up 36 percent.
A robust advertising environment, a boon to most well-positioned media companies this year, also boosted Disney (DIS: Research, Estimates), the company said.
The increases were partially offset by higher sports programming costs at the ESPN cable sports networks and start-up costs associated with the launch of SoapNet and various international Disney Channels.
Results at Disney's Parks & Resorts segment were also healthy, bolstered by increased guest spending and record theme-park attendance at Walt Disney World. The unit posted revenue that rose 13 percent to $1.9 billion, with operating income up 14 percent at $565 million.
 "Fast Pass," the new system that allows theme park visitors to avoid long lines by setting a pre-arranged admission time to popular rides, contributed to the consumers' spending at the property.
"(Visitors) now have time to spend money and do other things, and they are much happier not waiting in line," Disney Chairman and Chief Executive Officer Michael Eisner told analysts on a conference call.
Results in the film division - which included the summer releases of "Dinosaur," "Gone in 60 Seconds" and "Shanghai Noon" - were disappointing. Revenue decreased 2 percent to $1.2 billion, and operating losses increased from $1 million to $3 million.
Can "Millionaire" keep up its strong pace?
Disney executive addressed questions about the company's ability to maintain the unusual strength of "Millionaire," a ratings workhorse that airs three times a week, with each episode landing high in the top ten.
Now that the show is one-year-old, some experts argue that viewers, seeking out new TV phenomenon like CBS's "Survivor," or NBC's upcoming Olympics coverage, may turn away from the program.
 But the company said it expects the show's ratings to remain strong, as do advertisers, who have already contracted -- during the so-called upfront period in May -- to pay top dollar to air spots in the coming season when "Millionaire" expands to four nights a week.
"We sold it in the upfront under relative conservative circumstances, actually expecting that there would be a decrease in ratings," Disney president Robert Iger told analysts.
"We are not predicting that the rating phenomenon will remain as high as it was, but nevertheless we did bring in substantial advertising revenue from it," Iger added. "We believe that the show is still and will continue to be strong."
ABN AMRO's Londoner said that despite the improved performance of ABC's competition, the network will continue to bring healthy returns to Disney.
"The TV segment should be pretty good, and they had a really solid upfront, which is going to govern much of next year," said Londoner, who rates the stock at buy. "They start out with a nice lead."
Shares of Disney closed on Thursday at 42-7/16, up 2-5/16. 
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