Disney Beats Estimates, Buys Club Penguin

Walt Disney (DIS) reported a 5% increase in third-quarter earnings and beat expectations on Wall Street, while also announcing an acquisition in the Internet space.

The media giant posted net income of $1.2 billion, or 57 cents a share, for the quarter ended June 30, up from the $1.1 billion, or 53 cents a share, it logged for the same quarter last year.

Excluding one-time items, the company said it earned 58 cents a share for the quarter, beating expectations on Wall Street for earnings of 55 cents a share, according to Thomson First Call.

On its top line, Disney reported a 7% rise in quarterly revenue to $9.05 billion, compared with analysts' target of $9.02 billion.

Separately, Disney said it will acquire Club Penguin, a virtual community for children that has 700,000 subscribers. The company will pay $350 million for the property, but Club Penguin's founders will have the option of garnering an additional $350 million by the end of 2009.

During the third quarter, Disney released the hit films Pirates of the Caribbean: At World's End and Ratatouille. It finalized the sale of its ABC radio stations, and it concluded a probe into backdated stock options at its Pixar Animation Studio unit.

Its earnings got a boost from double-digit growth in operating income at its media networks division, its parks and resorts business and its consumer products segments. Its film studios lagged, with a 20% decline in operating income.

Shares of Walt Disney closed up 83 cents, or 2.5%, to $33.83 Wednesday.

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