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Disney Wants Quarter Forgotten

Disney also touted its ability to capitalize on new technology, citing a recent agreement with Apple (AAPL) to provide video content for the iPod.

"As a modern media company Disney is well positioned to take advantage of these changes by continuing to develop strong content and leverage that content across our businesses and new technologies. Our agreement with Apple to make programming available on the iPod is a fitting example of our efforts in that regard. As the media landscape continues to change, our creative excellence and consumer focus will enable us to continue delivering benefits to shareholders."

But some of the company's new initiatives will be a drain on the company in the near term, officials warned. Specifically, Disney is investing heavily in both developing video games and in a new wireless phone service. The company expects to lose $130 million, for instance, on its new mobile phone service next year, Staggs said. And because the company will initially lose money on each customer it signs up for the service, its losses in the wireless area will widen the more successful it is at acquiring users.

Company officials had little to say about Disney's relationship with Pixar (PIXR), the film studio headed by Steve Jobs that has produced a number of hit films distributed by Disney. Jobs said last week that the two companies were in "deep discussions" about continuing or expanding their relationship. Jobs also said he hoped to work out a distribution relationship for Pixar's films by the end of the year.

On the conference call, Disney CEO Robert Iger declined to go beyond Jobs' comments. Regardless of how the talks conclude, Disney will distribute Pixar's upcoming film Cars this summer and expects to do well with it, Iger said.

Disney is going to benefit from the Pixar relationship this year, "no matter what happens," Iger said.
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