Theme parks boost Disney

Disney shares fell 1.8% to $40.28 in after-hours trading last night.

The operator of television networks ESPN and ABC, a movie studio and theme parks, posted fiscal first-quarter revenue of $10.8 billion, a 1% gain from a year earlier. Analysts on average had expected revenue of $11.2 billion.

Analysts say the largest U.S. media corporation is searching for new ways to grow its ABC television unit.

The results came a day after news broke that Disney's ABC television unit was talking with Spanish-language broadcaster Univision about creating a 24-hour English-language news channel aimed at the growing Hispanic market in the United States.

Disney CEO Bob Iger would not comment on the reports during a conference call with analysts. But he said the company "has an interest in seeing that ABC News continues to flourish, and giving it an opportunity to look for and create some growth opportunities on its own."

Disney reported a fiscal first-quarter net income gain of 12% to $1.5 billion or 80 cents per share. Analysts on average had expected 71 cents per share.

Jointly operating a channel with Univision could help ABC reduce news-gathering costs, and offset flagging business. Revenue at Disney's broadcast unit fell 7% in the quarter to $1.5 billion.

Iger has made several moves to boost ABC's bottom line. In 2010, the unit shed about a quarter of its staff or 400 people.

ABC News previously explored deals to partner with CNN or Bloomberg TV, but the talks never got off the ground.

The company also has been trying to boost the movie studio's performance. Chief Financial Officer Jay Rasulo said the 16% drop in quarterly revenue to $1.6 billion reflected the company's strategy of reducing the number of films it produces to help build profits.

Operating income at the studio grew 10%.
Disney had a surprise hit in the quarter with modestly budgeted film "The Muppets", but suffered from tough comparisons with hits "Tangled and "Tron: Legacy" a year earlier.

Revenue at media networks, the company's largest unit, gained 3% to $4.8 billion with growth at sports powerwhouse ESPN and the Disney Channels.

The theme parks unit, which like media networks have held up through a struggling economy, rose 10% to $3.2 billion. "Disney continues to exhibit pricing power, which shows the strength and competitive advantage of that business," Morningstar analyst Michael Corty said.

The company will launch Disney's fourth cruise ship - the Disney Fantasy - in March.

But analysts have pointed to uncertainty now surrounding the luxury cruise industry after Carnival Corp's Costa Concordia capsized off the coast of Italy. Rival Royal Caribbean Cruise has warned it will face a sharp drop-off in new cruise bookings because of that wreck.