UPDATE 3-Disney profit beats Street, no sign economy hurts

(Recasts first paragraph, adds details from conference call, analyst comments, share price)

By Gina Keating

LOS ANGELES, Feb 5 (Reuters) - Walt Disney Co's (DIS.N) quarterly profit topped Wall Street targets as Disney World set attendance records and its TV and consumer businesses grew despite a turbulent U.S. economy, while executives said they were "pretty optimistic."

Disney shares rose 5.5 percent in after-hours trade on the first-quarter results and the company's outlook for more growth in parks and media networks -- its top two earners. The stock's rise more than offset a 2.7 percent drop in regular trade.

Nor did the Hollywood writers' strike, which started a month into the quarter and appears to be on the verge of ending, hurt results, Chief Executive Bob Iger said.

Wall Street had been anxiously watching for signs that the slowing U.S. economy had led to weakened advance bookings at Disney's domestic resorts, which some consider a bellwether of consumer confidence.

Instead, Disney saw double benefits from a weak dollar, which has kept Americans vacationing at home while also drawing in more international tourists.

A strong ad market and tight supply pushed sales significantly ahead of last year's levels despite lower TV ratings, and are helping maintain growth, Chief Financial Officer Tom Staggs said.

"The pace of business to us looks pretty good," Staggs told analysts on a conference call. "We feel like we've got the ability to respond if necessary. But right now we're feeling pretty optimistic about where things go from here."

'BETTER PREPARED'

Net profit dropped to $1.25 billion, or 63 cents per share, from $1.7 billion, or 79 cents per share, in the year-earlier quarter, which had been boosted by the sale of interests in Us Weekly and E! Entertainment. Revenue rose 9 percent to $10.5 billion.

The 63 cents per share earnings topped Wall Street's average target of 52 cents, according to Reuters Estimates.

Pali Research analyst Rich Greenfield said the results showed just show how "well diversified" Disney is.

"I think that it truly sounds like they are better prepared ... to deal with an economic downturn than they were during the last recession," said Greenfield, who has a buy rating on Disney and owns no shares.

SMH Capital analyst David Miller, who also has a buy rating and owns no shares, said it was "tough to find a flaw in this earnings release ... it's one of the best I've seen."

Spooked consumers kept buying Disney-licensed video games and merchandise, especially for "Hannah Montana" and "High School Musical", propelling the consumer products division to 29 percent revenue growth in the quarter.