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Disney Revenues Down, Hopes Pinned on Summer Releases

The Walt Disney Company reported Tuesday a drop in its revenues from its entertainment division for the first quarter ending on March 31. Studio revenues were $1.8 billion for the first three months of 2006 compared to the $2.3 billion from the same period in 2005. Disney Chief Financial Officer Tom Staggs said in a conference call that the second quarter is anticipated to be stronger for the studio due to the summer release of the animated “Cars” and the live-action “Pirates of the Caribbean: Dead Man’s Chest.” Overall, Burbank-based Disney reported net income of $733 million or $0.37 per diluted share on revenues of just more than $8 billion. That is an increase over the $657 million in net income or $0.31 per diluted share on revenues Disney Chief Executive Officer and President Robert Iger said in the conference call he is confident that company is moving in the right strategic course to provide branded content across traditional and emerging technology platforms to global markets. Some of the company highlights in the first quarter were the completion of the acquisition of Pixar Animation Studio; “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe” becoming Disney’s highest-grossing live action film; and making high-rated ABC Television programming available online, Iger said. Bringing “Lost,” “Desperate Housewives” and “Alias” to the Internet is a response to consumer trends, Iger said. “We are bringing the television economic model to the Internet in that it is ad supported and free to consumer,” Iger said. Disney’s profits for the quarter were driven by its television programming, with revenues of $3.6 billion compared to the just more than $3 billion for the first quarter of 2005.

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