Posted By: Eugene Taylor

By GARY GENTILE, AP Business Writer

LOS ANGELES - A strong summer movie season, including the hit "Pirates of the Caribbean: Dead Man's Chest" boosted per share earnings at The Walt Disney Co. 89 percent in the fourth quarter, the company reported Thursday.
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The media conglomerate also reported selling nearly a half million films over the Web through the Apple Computer Inc. iTunes store since September and said it was within weeks of announcing new deals with cable operators that would include additional revenue from digital offerings.

Increased ratings at its ABC network and strong performance from its ESPN cable channel also helped increase profits in the quarter.

The Burbank-based company reported net income of $782 million, or 36 cents per share for the quarter ended Sept. 30, compared to $379 million, or 19 cents per share in the same period last year.

Revenue increased to $8.784 billion from $7.734 billion in the same period last year.

The results beat analyst expectations of 34 cents per share on revenue of $8.694 billion.

Studio results were helped by a favorable comparison with last year when the company spent millions of dollars to release a slew of films produced by its Miramax film division. The releases were part of a deal Disney made to allow Miramax founders Bob and Harvey Weinstein to exit the company and form their own studio.

The studio also cut 650 jobs from its worldwide workforce during the quarter and said it will make fewer films, concentrating on movies that have franchise potential.

Attendance at its domestic parks was essentially flat during the quarter, with a decline at Disneyland in California offset by gains at Walt Disney World in Florida.

But per guest spending increased at both parks as did profit margins. This year's results included a full quarter of operations at its latest park in Hong Kong, versus two weeks in the prior year period.

Profits rose at the company's cable networks division in the quarter, driven largely by increased fees and advertising from ESPN. The Disney Channel is also showing strong growth from the success of its "High School Musical" movie and the "Hannah Montana" series.

But profits dropped by $19 million at the broadcast network as higher revenue from the sale of TV shows on DVD was offset by investments the company is making in a Disney-branded mobile phone service.

Disney chief executive Robert Iger said the company could conclude a new deal with cable TV operator Comcast Corp. in the next week or so, a deal that would likely include delivering shows to customers online as well as on cable.

"It's clear that their investment in technology, not just in their standard business but in their new businesses, particularly broadband and in phone service area, provide us with significant opportunities as the owner of great brands and great content to really expand our relationship with them," Iger said on a conference call with analysts.

For the full year, the company reported net income of $3.374 billion, or $1.64 per share, compared to $2.533 billion, or $1.22 per share last year.

Disney had revenue of $34.285 billion in fiscal 2006 compared with $31.944 the previous year.

Shares of Disney rose 48 cents to $33.58 at the close of trading on the New York Stock Exchange, a 52-week high. Shares have risen 38 percent since the beginning of the year.

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