Walt Disney Co. on Wednesday reported sharply higher quarterly earnings, topping Wall Street expectations as it released results earlier than planned after Comcast Corp. launched an unsolicited takeover bid.
Disney cited strength in its studio division, including the DVD releases of "Finding Nemo" and "Pirates of the Caribbean," and said it expects earnings growth from continuing operations of more than 30 percent in fiscal 2004.
Disney also said results at its television networks, including ESPN and ABC, had been boosted by lower sports programming costs and a recovery in advertising.
Largely in response to the Comcast offer, shares in Disney rose to $27.95, their highest level since July 2001. It was the stock's biggest one-day move since the stock markets reopened after the Sept. 11, 2001, attacks.
Disney, which had been scheduled to release its earnings after the close of the market on Wednesday, instead released results in the morning after the Comcast bid was announced.
The unsolicited bid overshadowed Disney's strong results, with many analysts saying the Comcast offer would have to be raised to complete the stock deal, which was initially valued at $54 billion.
Disney's net income rose to $688 million, or 33 cents per share, in the first quarter ended in December, from $36 million or 2 cents, in the year-earlier quarter. The year-earlier profit was $107 million, or 5 cents, excluding the effect of an accounting change.
The Wall Street consensus estimate from analysts had been for earnings of 23 cents per share, as tracked by Reuters Research, a unit of Reuters Group Plc.
Revenue was $8.55 billion compared with $7.17 billion a year earlier.
Disney Chief Executive Michael Eisner in a statement said the company was targeting double-digit earnings growth through at least 2007. Eisner, who Comcast said had rejected friendly merger talks, did not comment on the proposed takeover in Disney's earnings release.
Attendance at Disney's theme parks rose in the past quarter, although the increases there were partially offset by higher staff costs and lower guest spending at Walt Disney World, Disney said.
Pension and post-retirement medical costs for the parks and resorts segment rose by $34 million in the quarter, Disney said, and are expected to rise by an additional $103 million through the rest of fiscal 2004 compared with 2003.
Comcast offered to acquire Disney by exchanging 0.78 share of its class A stock for each Disney share. The bid initially placed a 10 percent premium on Disney shares based on Tuesday's closing prices.
Shares of Disney were up $3.50, or 14.5 percent, to $27.58 on the New York Stock Exchange while shares of Comcast were down $2.63, or 7.8 percent, at $31.30 in midday Nasdaq trading.
