• by Wayne Friedman , May 10, 2006

ABC network has been having good advertising sales periods going into the upfront. Make that excellent.

For its fiscal second quarter, Walt Disney earnings show that the broadcasting business operating income went almost straight up--a 485 percent rise, or $160 million from $38 million in the first quarter of 2005.

Much of this gain came from dramatically improved prime-time national advertising sales from the likes of ABC's hit shows, "Desperate Housewives" and "Lost." Much of ABC's ad income came from advertisers who regularly buy 75 percent to 80 percent of their annual TV revenue before the new programming season starts in September--during the upfront period that runs in May/June.

Other major contributors to the big hike include the Super Bowl, which ABC aired as part of its rotation with other NFL TV networks, as well as its annual Bowl Championship Series. Touchstone Television also helped with this gain, from syndication license fee sales paid by TV stations for the NBC show "Scrubs." All this put Disney's broadcasting business into skyrocketing mode.

Walt Disney's company-wide net income rose in its second quarter 12 percent to $733 million, and revenue gain 3 percent to $8 billion. The company's net income of 37 cents a share beat the consensus stock market analysts' projections of 31 cents a share.

In addition, Disney's cable networks continued to thrive--but not by the exact same percentage gains as the broadcasting group. Operating income, from the likes of ESPN, rose 5 percent to $809 million. For all its media networks group, Disney's operating incomes climbed 20 percent to $969 million.

Continuing their industry rebound, Disney's theme parks reported a 17 percent jump in operating income--driven by the group's domestic parks, in part from Disney's 50th anniversary celebrations.

But not all was well in the house of mouse.

ESPN mobile phone sales were lower than hoped for, said Walt Disney chief executive Bob Iger, who added the company was infusing more effort into the product's marketing. Disney said it still anticipated investing more than $130 million.

Disney's consumer products division continued to suffer. It took an 8 percent dip in operating income due to increased investment in its video games business and declines in its merchandise licensing.

Disney's still young Internet businesses are expected to grab $500 million in revenue.

At the close of the day, Disney shares rose 81 cents, or 2.8 percent, to $29.58.

The recent acquisition of Pixar Animation Studios will no doubt help Disney's financial numbers next year. Chief Financial Officer Thomas Staggs told analysts, in a conference call, that Pixar should bring 10 cents of earnings to the company's 2006 results.