Disney’s quarterly earnings double

Walt Disney Co. said Thursday that its fiscal fourth-quarter profit more than doubled on the strength of the two top-grossing domestic films of the year.

But executives at the Burbank-based entertainment giant would not predict a fifth straight year of at least 10% profit growth, which sent Disney shares lower in after-hours trading.

Analysts said the pullback by investors reflected a number of cautionary notes sounded on the company’s conference call and the realization that by reducing the number of movies it makes, Disney is increasing the potential effect of one failure.

“They seem to have a strategy of two ‘tent pole’ releases next year,” said Lehman Bros. analyst Vijay Jayant, referring to the third movie in the “Pirates of the Caribbean” series and an animated release from its Pixar Animation Studios, “Ratatouille.”

“As long as they both do fine, that’s the right strategy,” he said. “But the risk has increased.”

Disney eliminated 650 jobs in its movie division this summer, saying it would focus on family-friendly movies.

The company reaped huge rewards from the top films of 2006 -- the second “Pirates” movie and Pixar’s “Cars.” Without the expenses from Miramax Films’ final Disney movies, the studios as a whole swung to an operating profit of $214 million from a year-earlier loss of $313 million.

All told, fourth-quarter profit soared to $782 million, or 36 cents a share, from $379 million, or 19 cents, a year earlier, ending the first full year under Chief Executive Robert Iger with an exclamation point.

Sales in the quarter that ended Sept. 30 increased 14% to $8.78 billion.

Disney shares fell 58 cents to $33 in extended trading after executives wouldn’t forecast another year of double-digit profit growth. The stock rose 48 cents to $33.58 in the regular session; it’s up 40% this year.

In keeping with Iger’s strategy of spreading successes through its divisions, Disney is creating more theme park attractions based on Pixar stories and licensing “Cars” merchandise that has brought in more than $1 billion to retailers. Iger said Disney would try to get more from its characters and movies by investing still more in games, some $130 million for development during fiscal 2007, compared with $100 million in the year just ended.

On cable, the Disney Channel has spawned DVDs and top-selling albums from the movies “High School Musical” and “The Cheetah Girls” and the series “Hannah Montana.”

Disney’s theme parks brought in $396 million in profit, 28% more than a year earlier, as attendance edged up.

At Disney-owned ABC and cable networks including ESPN, profit rose 18% to $883 million.

For the full year, Disney’s net income rose 33% to $3.37 billion, or $1.64 a share, from $2.53 billion, or $1.22, a year earlier. Revenue rose 7% to $34.3 billion.

In a conference call with investors, Iger said Disney might sign a long-term deal with Comcast Corp. as soon as next week. Iger did not say whether the cable operator would be paying more for Disney’s cable content, but he said the company might offer new packages as Comcast expands its video-on-demand, Internet and phone services.

joseph.menn@latimes.com