EARNINGS: Disney Posts Higher Than Expected Gains

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The Walt Disney Company posted 10 percent increase in earnings for the first quarter ended December 30, 2006. The company posted $9.7 billion in revenue for the quarter versus $8.9 billion a year ago. Diluted earnings per share increased to 70 cents a share compared to 37 cents in the prior-year quarter.

Results for the quarter include gains on sales of Disney’s interests in E! Entertainment and US Weekly, which totaled $1.1 billion, and an equity-based compensation plan modification charge of $48 million associated with the planned ABC Radio transaction.

Cable networks increased their operating income by $81 million to $453 million for the quarter. Increases were attributed to subscriber growth at the international Disney channels, increased DVD sales for High School Musical and higher affiliate and advertising revenues.

In the broadcasting segment, operating income increased to $297 million, up $63 million from the previous year. These gains are attributed to the absence of Monday Night Football at the ABC Television Network, strong DVD sales of Grey's Anatomy and Lost and an increase in political advertising at the owned television stations. The increases were offset by higher costs in programming and production and the costs associated with the Disney branded mobile phone service.

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