Ad growth, economic impact key for Disney quarter

Thu Nov 10, 2011 12:03am EST

* Disney reports fourth-quarter results Thursday

* ESPN, other networks seen driving growth

* Shares up slightly for the quarter

By Lisa Richwine

LOS ANGELES, Nov 10 (Reuters) - Walt Disney Co will seek to reassure Wall Street that global economic woes have not hurt its nearly $11 billion parks and resorts business or held back an advertising rebound at ESPN and its other cable networks.

Disney is expected once again to deliver a solid quarter led by growth at the media and parks divisions when the company releases results on Thursday.

That would extend a pattern of steady gains under Chief Executive Bob Iger, who announced last month he will step down as CEO after March 2015.

Last quarter, the company's shares tumbled 15 percent the day after executives warned about higher programming and production costs at ESPN, lower syndication sales at ABC and tough year-over-year comparisons for its studio division in the just-ended fourth quarter.

With those issues laid out, analysts are betting on few surprises and a revenue increase of about 6 percent. But some remain nervous that slowing growth and economic uncertainty across the United States and Europe will give travelers pause.

"I don't think there's a lot of mystery on the numbers," said Wunderlich Securities analyst Matthew Harrigan. "What's of more concern is how the economy is."

"That certainly affects the parks" as well as advertising at media networks, Harrigan said.

Morningstar analyst Michael Corty said Disney had run the parks business well through the unsteady economy by weaning customers off of earlier discounts. Investors will turn their focus to guidance for next year.

"They should have some visibility into what their bookings look like" for the coming months including spring break, Corty said.

Overall, Disney's results should reflect advertising strength already reported by media rivals Comcast Corp , Time Warner Inc and News Corp , analysts said.

Competitors reported higher quarterly earnings as advertisers continued to buy commercial time, particularly on cable television.

Disney shares have gained about 1.7 percent since the company last reported results in early August.

ESPN, one of the industry's most successful cable channels, should lead the media division higher as advertisers continue to flock to sports programming.

The company's studio division, often a swing factor for results, had hits in the quarter with drama "The Help" and a 3D makeover of classic "The Lion King". But that showing will be compared to blockbuster animated movie "Toy Story 3" and other successes last year.

Iger may face questions from analysts about who will succeed him in the CEO job. Theme parks chief Tom Staggs and Chief Financial Officer Jay Rasulo are seen as leading candidates.

Analysts on average expect Disney to report fiscal fourth-quarter earnings of 55 cents per share, according to Thomson Reuters I/B/E/S. Revenue is forecast to rise 6.3 percent from a year earlier to $10.4 billion.

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