Disney Dazzles Wall Street

Updated from 4:40 p.m. EST

Disney (DIS Quote) beat first-quarter earnings targets and confirmed it's selling its radio assets in a $2.7 billion deal.

For the first quarter ended Dec. 31, the Burbank, Calif., media giant made $734 million, or 37 cents a share, up from $686 million, or 33 cents a share, a year earlier. Revenue rose 2% from a year ago to $8.85 billion.

Latest-quarter results benefited from a 2-cent-a-share gain related to the sales of a cable television equity investment and of a magazine business. Excluding one-time items, latest-quarter earnings rose to 35 cents a share from 34 cents a year earlier. Analysts surveyed by Thomson First Call were looking for a 30-cent profit on sales of $8.79 billion.

The company generated $376 million in free cash flow during the quarter, reversing a deficit of $191 million in the prior-year quarter. The change in free cash flow for the quarter reflected an increase of $423 million in cash provided by operations and a decrease of $144 million in capital expenditures.

The increase in cash provided by operations was primarily due to the timing of collections of advertising receivables at Media Networks, lower net investment in films, and higher cash distributions from equity investees. These increases were partially offset by the timing of payments for accounts payable and accrued expenses.

During the first quarter, Disney repurchased 49 million shares for $1.2 billion. On Jan. 23, Disney's board expanded the buyback plan to 400 million shares.

"I am encouraged by the solid momentum in our earnings and the financial and creative strengths that underpin these results," said CEO Robert Iger. "We continue to focus on our strategy of creating the finest content, embracing leading edge technologies, and strengthening our global presence and in doing so, we are confident in our ability to deliver long-term success across each of our businesses.